Scrapped IPOs Follow Worst Stock Rout in BRICs: Corporate Brazil

Is Brazil losing its luster for global investment?

Not such a sweet investment? Not such a sweet investment?

July 24 (Bloomberg) -- Brazilian companies are canceling initial public offerings at the second-highest rate among the biggest emerging markets as slowing economic growth makes the country’s benchmark stock index the worst performer this year.

 Three IPOs in Brazil were scrapped this year, while seven were announced, compared with zero withdrawals in China and less than a third of offerings this year in India, data compiled by Bloomberg show. One initial share sale was announced in Russia as well as one cancelation. Brazilian companies raised a combined 3.88 billion reais ($1.9 billion) in 2012 through IPOs, down 40 percent from the same period a year ago.

Grupo BTG Pactual, the investment bank led by billionaire Andre Esteves, completed the biggest IPO in Brazil this year when it raised 3.23 billion reais in April. The stock is down 8.1 percent since then.

Brazil’s economic growth will slow to 1.9 percent this year from 2.7 percent in 2011, according to the median forecast in a central bank survey of 100 economists released July 23. That would be the second-lowest rate since 2003 even as policy makers trim interest rates, cut taxes and expand credit to spur demand.

Biosev planned to use proceeds to repay debt and expand its sugar-cane output, according to a prospectus published on its website. The company declined to comment on the cancellation.

Foreign Investors

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