Brazilian stock exchange operator BM&FBovespa expects a robust pipeline of new listings once market conditions settle down, its chief executive said on Thursday. The world's fourth-largest exchange operator has had about 40 companies put aside plans to make an initial public offering (IPO) since 2010, due to volatility in capital markets, Edemir Pinto told Reuters in an interview.
"We had about 40 companies step back, but it wasn't that they changed their minds and they aren't going to do an IPO, it's just because of the market conditions," Pinto said through an interpreter on the sidelines of an annual meeting of stock exchange heads being held this week in Johannesburg.
"We believe the potential in Brazil is huge." He declined to say how many companies he expected to list in 2012. BM&FBovespa and exchanges from Russia, India, Hong Kong and South Africa said on Wednesday they would form an emerging-markets alliance to cross-list their flagship equity index products.
Brazil expects strong demand for its equity index derivatives from Hong Kong and Indian investors, given its rising Asian trade and surging foreign direct investment from the region, Pinto said. The exchange has already agreed to partner with other Latin American exchanges, which have been dwarfed by Brazil in trading volume. Pinto said he eventually hoped to have companies cross-list in Brazil and other Latin American markets, adding that a capital alliance with a neighbour - while not on the cards in the immediate future - could be a long-term option.
"Our focus now is to have partnerships with Latin American exchanges to create a stronger market, a more integrated environment to help them develop new products," said Pinto, an economist by training who joined the Brazilian Mercantile and Futures Exchange in 1986. "If this advances, then we could develop some kind of capital investment strategy. This is not part of the discussions now, but we wouldn't say that we would never do that."
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