(Bloomberg) -- Brazil has seen the most initial public offerings and follow-on share sales this year since 2013; offering prices, however, have tended to come in at the lower end of the projected ranges.
That's left companies in a dilemma: Should they take advantage of the propitious moment and maybe raise less than expected, or wait to see what happens in an election year and risk the likelihood of volatility and economic unknowns?
None of the Brazilian IPOs this year have reached the highest targeted price. Some have even come in below the forecast range. The shaky pricing environment has prompted some companies to drop their planned sales, including Unidas and Tivit. Petrobras unit BR Distribuidora may wait until 2018 if market conditions aren't there, Petrobras President Pedro Parente said in October.
“For now, pro-market candidates aren't doing well in opinion polls," Hersz Ferman, an economist at Elite Corretora, said, regarding elections. “Should this not change in coming months, the probability of having a harder time passing structural reforms, which we need, increases, and could leave markets volatile and negative. I believe this scenario would be bad for companies intending to IPO."
--With assistance from Aline Oyamada
To contact the reporters on this story: Taís Fuoco in Sao Paulo at tfuoco1@bloomberg.net, Roger Oey in Sao Paulo at roey3@bloomberg.net.
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Christiana Sciaudone
©2017 Bloomberg L.P.
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