The Brazilian units of cosmetics maker Coty and retailer Cencosud have included Bolsonaro risk in their recent stock offering prospectuses, while Solar Bebidas – distributor of Coca-Cola Co – warned of turmoil that could precede the 2022 presidential election.
Bolsonaro’s recent confrontation with the Supreme Court (STF) raises fears about the completion of reforms in the country and threatens the viability of about 25 IPOs that are in the oven. Added to the 44 IPOs completed this year so far, they would break the Brazilian record of 2007 IPOs. The information is from the Estadão portal.
Last week, Bolsonaro eased his dispute with the STF, but investors, analysts and investment bank executives still question how long the truce will be. The Ibovespa+0.60% accumulates a drop of around 1.5% this year, one of the five global indexes in negative territory in 2021.
“The prospects for IPOs are more challenging. A potential institutional crisis could reduce the chances of approving the reforms needed to boost economic growth,” said Gustavo Miranda, head of investment banking at Santander Brasil.