O Bank of Americaplaced first in Brazil in investment banking revenue, expects the business to rebound after the 60% slump so far this year.
“Although the market is down, we remain optimistic looking ahead, mainly because there is the possibility of an interest rate cut in Brazil in the second half of this year that would likely stimulate business,” Bruno Saraiva, co-head of investment banking at the BofA for Brazil, said in an interview.
Revenue from advising on mergers and acquisitions, and leadership in equity and bond issuance transactions fell to US$162 million in Brazil this year through May 10, down from US$405 million in the same period last year, according to the research firm Dealogic. BofA had the highest revenue in the period, with 14.8% market share, up from 12.8% in the same period last year.
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“We continue to feel the impact of the Covid pandemic, the global monetary tightening and a sharp decline in investment bank commissions, not just in Brazil but around the world,” said Saraiva. The last quarter of 2023 could be the strongest, he said.
Bank of America was one of the advisers to Natura in the sale of its luxury cosmetics brand, Aesop, to L’Oréala business approved by the Where on Wednesday.
Capital markets transactions led by BofA included an additional R$1 billion share sale by the healthcare company hapvida. The bank also led block share sales of R$ 180 million in M Days Whitea biscuit and pasta maker, and R$ 428 million from GPS, which provides outsourced cleaning, maintenance and security services.
The bank was also among the leaders of a US$750 million global sustainability bond issue from the Bank of Brazilas well as a $2.25 billion global bond issued by the federal government.
Total share sales of Brazilian companies have dropped nearly 50% this year to 8.7 billion reais, according to data compiled by Bloomberg.
“We expect capital market activity to return, with M&A discussions becoming more and more frequent,” Hans Lin, co-head of investment banking in Brazil at BofA, said in an interview.
“Following sovereign and quasi-sovereign bonds reopening the market and with global interest rates stabilizing somewhat, we are seeing increased interest among issuers in global bond offerings, with a more challenging local bond market due to lower rates. highs, low volumes and shorter maturities,” said Lin.
Source: Moneytimes
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