Will Brazil’s ECM bankers get in their own way?

Brazilian initial public offerings have long been dogged by lack of underwriter discipline. The poor performance of many of IPOs in 2007 may have been the fault of both buyers’ and sellers’ exuberance, but in the years since it has often felt like only investors have learned any lessons. Time and again IPOs have failed to take off when underwriters have promised companies ambitious valuations that investors baulked at.

Many deals have closed since then, of course, but, whenever momentum has been building, if domestic politics or international risk aversion didn’t kill it off, then lack of underwriter discipline conspired to sour otherwise favourable investor sentiment.