Political uncertainty creates challenges for Brazil’s booming IPO industry

Fiscal uncertainty and political instability are among the main factors driving foreign investors out of the country.

RIO DE JANEIRO, BRAZIL - The Brazilian capital market is going through the hottest IPO phase in its history. This year alone, there have been more than 40 initial public offerings (IPOs) through August, with deal volume reaching a new record of more than R$60 (US11.6) billion. Considering the follow-ups, stock offerings have already exceeded R$100 billion this year.

It is an unprecedented moment with an impact on the market. With the reduced participation of foreign investors in initial offerings, domestic investment funds have taken the lead in the IPO window on the demand side. Foreign participation . . .

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