Considering what a good year Iunes is having, it’s no wonder. As the executive director of Brazil’s Banco Itaú BBA, Iunes and his investment banking colleagues are poised to reap a windfall as Brazilian companies burst onto the country’s public markets this year in numbers not seen since 2007.
Itaú has already been a so-called book runner in seven of the eight companies to go public so far in Brazil this year, and another 20 or so companies are expected to come public this year — with twice as many presenting stock offerings.
Comparatively speaking, those are some big numbers. In 2009 and 2008, just six and four Brazilian companies went public, respectively. (The country saw 24 and 12 offerings, including initial and secondary, altogether in 2009 and 2008.)
Last year, 23 Brazilian companies had offerings, with just 11 IPOs, including the largest share issue ever: that of Braziilian oil and gas giant Petrobras, which raised $67 billion. Indeed, because companies didn’t want to compete with Petrobras for funds or mindshare, many in the oil services sector put off plans to sell shares until this year.
That means that today, “There are a lot of big cases and big stories to come,” Iunes told me, shouting over the hustle and bustle of Galeão International Airport. “[You’ll see] infrastructure [companies], oil and gas, and retail consumption – all related to Brazilian stories.”
Among the Brazilian businesses to come public already this year are automotive parts producer Autometal; shopping mall operator Sonae Sierra Brasil; and the women’s shoe retailer Arezzo, which raised roughly $340 million the day of its January 31 offering.
What you won’t see this year are “big names, like you have in the U.S. and China and places like that,” said Iunes. “There will be some tech stories, for example, but we don’t have the Internet bubble like we’ve had in the past. Investors see Brazil as a promising environment for consumer Web companies, but we’re a long way from something like a Facebook going public.”
Said Iunes, as he also negotiated a new flight with an airport agent: “We became overshadowed for many years because of inflation and interest rates.” Specifically, foreign investors who’d poured into the country in the ‘90s ran screaming when Brazil devalued its currency in 1999.
“But between improvement in our market and better corporate governance of companies, Brazil has been coming back since 2006,” said Iunes. “It’s a real market. We trade $5 billion a day. Our index comprises companies whose collective market cap is $1.5 trillion. It’s much smaller than the U.S., of course, but it’s relevant, and we’re still in the early stages. Brazil is definitely a growth story.”