Brazilians are optimistic about new IPOs

IPOs may be good opportunities for investors, but some care must be taken

Press Release ( - SAO PAULO, Brazil - May 30, 2017 - Starting an Initial Public Offering (IPO) process in Brazil is a very complex procedure. Only after several bureaucratic steps can a company open its capital on the Brazilian Stock Exchange. The great effort, however, is often offset by obtaining funds to carry out business expansion or pay off debts.

The growth in the number of IPOs in a country may indicate that its economy is growing or, in the case of Brazil, recovering. Since the beginning of the recent Brazilian economic slowdown, the number of IPO has dropped dramatically. Since 2014, only one has occurred each year.

By 2017, however, the uncertain landscape seems to be giving way to a recovering economy. Since the beginning of the year, there have been three IPOs on the Bovespa, the country’s main Stock Exchange. The pace is expected to intensify from now on, with some experts expecting at least 10 more processes and more optimists individuals await up to 40 IPO until later this year.

If this scenario materializes in the coming months it can mean good news for Brazilians. The positive outlook for the improving economy could indicate economic growth and, consequently, new job openings and more investment opportunities.

The three IPOs that were already carried out in Brazil in 2017 were those of the Hermes Pardini laboratories, the airline Azul and the car rental company Movida. Together, the three processes were able to move almost US$ 1 billion on Bovespa.

Although important, the values presented above were not able to exceed the marks reached in 2013 and 2007. Four years ago, IPOs moved around US$ 5.3 billion. And a decade ago, in 2007, the numbers were even more impressive: almost US$ 17 billion were raised by 64 IPOs in the main Brazilian Stock Exchange.

In order for new IPOs to be more likely to occur in the coming months, some important steps must take place such as the approval of projects relevant to the government and new cuts in the basic interest rate.

The possibility of new offers of shares on the Bovespa in 2017 has caused thousands of investors, Brazilians and foreigners, to turn their attention to the Brazilian market. In fact, there can be great opportunities to make good profits, but one has to be cautious before start investing.

The euphoria when it comes to taking advantage of good opportunities should not overpower care when analyzing which moments are really interesting to invest. Planning, security and accurate analysis are extremely necessary in these cases to avoid hasty decision making.

Investors who intend to buy shares of new companies on Bovespa must act according to a well-founded strategic vision. In many cases, it is very important to seek the assistance of qualified professionals to define the best approaches.

Many market experts point out that these moments need to be analyzed under a long-term vision. For this to occur in a better way, it is necessary to examine documents and performance reports about the company business. Thus, it will be possible to obtain information to recognize if an IPO has a good chance of bringing profits to its shareholders.

About Toro Radar

We are the largest investment analysis, consulting and education company in the Brazilian Stock Exchange. Since 2011, our mission is to help our partners to value their capital by identifying the best opportunities in the Financial Market.

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