Companies queue and offer shares can add R $ 120 billion in 2020, in a new record

The queue of companies preparing debut at B3 in search of resources is robust and investment banks predict that the volume of stock offerings for next year, including subsequent (follow ons) and initial offers (IPO), will reach R$ 120 billion, setting a new record for the variable income market in Brazil. The projection is that, contrary to what is observed this year, the debutants on the exchange gain greater weight, which can be noticed in the number of companies that are already with banks hired to debut as a publicly traded company. For offers early next year, three companies are already applying for registration made in the Securities and Exchange Commission (CVM): the hosting of Locaweb websites, Mitre and Moura Dubeux, both construction companies. Among those with banks hired to debut at B3 next year are, for example, the shopping company Almeida Junior, the credit bio boa vista sCPC, the construction companies Kallas and Cury. Another offer that is expected to take place as early as the first quarter of next year is Banco Votorantim. Petrobras has also opened its intention to bring Gaspetro to the stock exchange in the second half of next year. The IPOs of companies of Caixa Econômica Federal are given volume: Security, Cards and manager. Among subsequent offers, stock sales by the National Bank for Economic and Social Development (BNDES) should win the scene, opening the year with the expected supply of jbs refrigerator, which is expected to take place as early as January. One of the biggest offers of the year, headed by the foster bank, should be the sale of shares of the oil company. The partner responsible for btg pactual's variable income area, Fabio Nazari, says that the more than 30 subsequent offers that occurred in 2019 on the Brazilian stock exchange demonstrated that the country's capital market is functional. These offers, he said, should act as "wing-openers" for the IPOs expected next year. "There's a lot of company preparing for an offer in 2020 and we're even putting together the portfolio for offers in 2021," Nazari says. The executive also says that the market is entering a more constructive scenario, in the face of a backdrop of recovery of the company's results. Also learn: Banco Votorantim prepares ipo The intense movement of companies towards the capital market is reflected in the banks' portfolio. Bradesco BBI,Alessandro Farkuh, who says the portfolio of companies in the bank to launch offers is the largest in history. "We have a portfolio with many transactions to be implemented throughout the first and second quarter of 2020," he says. According to him, the expectation is that the offers will take place uniformly throughout the year. Good winds. Even because of the expectation of improvement also in the economy, companies have begun to take from the drawer investment plans, as happened in the real estate and consumption sector, according to the head of capital market and variable income for Brazil morgan stanley Marcello Lo Re. He says that in the first half of the year, the primary component of the offers was of around 25%, reaching 40% in the second half of the year and evidencing a change in the profile of offers and greater intention of investments in the business. The president of Morgan Stanley in Brazil, Alessandro Zema, says that this increase in the share of primary emissions comes at a time that follows a broad movement of deleveraging of companies, which are now with the balance sheets prepared for a new investment phase. In recent years, some companies have even made stock offerings to raise funds for debt payment. BBI's Farkuh says more subsequent offers have been observed, faster and easier to offer on the market. But banks are already working on capital opening preparations, which is expected to consolidate as early as the coming months. This year, the Brazilian stock exchange was the scene of approximately R$ 84 billion in stock offerings, with 39 operations so far, and there were only five IPOs. This number should also approach r$ 90 billion, with offers that will be priced by the end of this week, with Unidas, Marfrig and Restoque. The number excludes emissions made outside the country, such as XP Investimentos. Appetite. Local investors should continue to show a lot of appetite for stock emissions in Brazil, but larger offers will be attended by foreigners, who although still cautious about the country, have begun to be more significant in the offers Brazilian. Nazari, of BTG, says that at the beginning of the year local investors were reaching 80% of the offers, but that now greater balance is already beginning to be observed in this division. In addition, the profile of gringos who have begun to be present in stock offerings in recent months has changed to those longer term. "It's just the tip of the iceberg. We are already seeing gringos with more strength and more quality," he said. According to Christian Egan, executive director of Global Markets and Treasury at Itaú BBA, Brazil is expected to attract investors again by 2020. "The main factor for the return of foreign investors is in gdp projections," he said. Regardless of the strength of foreigners, local funds maintain strength to ensure demand for stock offerings, as has already been proven throughout 2019. The flow of funds to funds has been large, with investors seeking higher profitability in low interest times. As of November, equity funds outperformed multimarkets and achieved the highest net funding in the industry this year: R$ 67.5 billion, up 171.9% over the same period last year. "This excess of local liquidity continues. The migration of fixed income to variable income has barely begun," says bradesco BBI executive.