Brazil’s Stone looks to follow PagSeguro in snubbing B3
NYSE too strong a lure for tech companies; Latin America needs ‘IPO catch-up’.
The success of Brazil’s PagSeguro’s recent IPO on the NYSE has led its competitor, Stone, to draw up plans to launch on the US stock exchange this year, according to market sources.
PagSeguro, which provides online and in-store payment services, raised $2.3 billion in January this year. This general rarity of technology company IPOs from Brazilian companies helped the IPO launch above its pricing range and the stock traded up 33% on its first day of trading.
If Stone follows PagSeguro to the NYSE, it will be bad news for Brazilian exchange B3, which is trying to attract other Brazilian tech companies to list locally. That could then become a strategic issue for investors looking for onshore Brazilian investments.
Stephen Dover, head of equity for Franklin Templeton, says he believes Latin America is falling in relative importance in his firm’s emerging market investment allocation because of his firm’s focus on EM technology.
“There are not enough technology companies or innovative companies listed in Brazil,” he says.
He adds that B3’s skew to commodity stocks is a problem for international investors because the exchange is not representative of the country’s real economy.