The country’s stock index is at record levels (it broke the 106,000 level in mid-July and it is also near to a record in dollar terms), which has led to a flood of new equity issuance, most of it secondary deals.
Investment banks are having a good year: according to data provider Dealogic in the first half of 2019 there were 19 deals worth a combined volume of $8,411, compared to $3,130 in the first half of last year. And the run rate is increasing.
As Euromoney went to press, there had already been more than R$10 billion ($2.7 billion) in deals in a pipeline chock full of follow-on deals.
On 23 July alone, Petrobras sold R$8.6 billion worth of shares in BR Distribuidora, in what was effectively a privatization of the company, and bankers say that domestic investors remain very keen to participate in a combination of state-driven and private sales.
However, some bankers report that investors are a little wary of follow-ons that are exits of investors or large-scale reductions in management ownership as they could signal inside knowledge that current valuations are frothy.
