Latin equities bounce back after grim day for new deals
Geopark moved forward with a slimmed-down IPO on Thursday as stock indices in Brazil, Chile and Mexico traded up
Chilean oil and gas firm Geopark was set to finalize its New
York listing on Thursday, as stock indices recovered after a
troubled start to the week.
Chile’s IPSA index rose 1.12% on Thursday,
while the Ibovespa was up 2.39% and Mexico’s IPC
increased by 1.02%.
Geopark cut the size of its deal, lowered the target price,
and took support from existing owners, after struggling to sell
20m shares at $8 to $10 apiece as planned. Yet the fact the
deal was advancing was something of a victory after share
markets fell earlier this week.
Volatility and dire market conditions forced
Grupo Gigante to
postpone its IPO of Office Depot de Mexico on
Wednesday, it said. The Mexican firm had offered 253m shares at
MXN16 to MXN18 apiece, meaning it could have raised up to
Brazilian auto part maker
Fras-le also halted its share
sale. It had planned a follow-on, but stepped back
amid the unfavorable conditions. Under Brazil’s
capital markets rules, the firm could pick up the deal in the
next 60 days without refiling documentation, LatinFinance
Latin equity markets have had a bad start to the year. They
were badly hit last month by a sweep of worrying news for
emerging market investors, including Argentina’s
surprise devaluation of the peso.
At $6.3bn, outflows from emerging market equity funds last
week were their worst since August 2011. LatAm-specific funds
were particularly hit. "People are favoring developed markets,"
said an ECM banker on Wednesday. "They will sustain the taper
better… in the US, everything is ripping."