Initial public stock offerings (IPOs) are expected to remain a rare event in 2024 on the Sao Paulo Stock Exchange, despite better macroeconomic conditions compared to last year and a major group of companies set to go public, according to an assessment by this Friday made by B3’s financial director, André Veiga Milanez.
“I don’t think 2024 will be a year with many IPOs. We see room for follow-ons (subsequent stock offerings),” the executive said during a conference with analysts and investors after B3’s results were released the night before.
“There is a very interesting ‘pipeline’ of potential IPOs, but it is difficult to predict” when the window for deals will open, the executive said.
After a robust cycle in 2020/2021, when there were 71 IPOs, including so-called restricted offerings and excluding the BDR issues of Aura, Nubank and G2D Invest, there were no IPOs on the Brazilian Stock Exchange in 2022 and 2023.
Milanez specified that the scenario is more optimistic for this year, with the possibility that interest rates will continue to fall and therefore “there should be a second half of recovery in activity” in the IPO market.
In January, B3 Executive Chairman Gilson Finkelsztain had already struck a cautious tone in terms of IPOs for 2024, citing that there are more than 100 companies preparing to go public in Brazil, but said he had seen only a few initial offerings this year, with more robust follow-up movement.
B3 announced Thursday evening net profit of 915.5 million reais for the fourth quarter of last year, down about 9% in the year-over-year comparison.
For BB Investimentos analysts Luan Calimério and William Bertan, the result of the São Paulo stock exchange operator was “negative… but in line with our expectations”.
According to them, the variable income segment continues to put pressure on B3’s results, given the weakness of the stock market influenced by interest rate uncertainty in the United States, but the company’s diversification initiatives have been relevant “to offset the revenues, and have proven to be more significant for each outcome.”
At 12.15pm the B3 stock fell by 1.6% to 12.45 reais. At the same time, Ibovespa recorded a decline of 0.4%.
When asked when the acquired Neoway will present balanced results, reaching “break even”, Milanez said that B3 expects this to happen in the first half of the year. According to previous predictions, this would have happened at the end of last year.
Source: Terra
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