Business

After Nubank, NYSE predicts several IPOs of Latin American companies in 2022

The focus on unicorns has helped the NYSE take on its main rival Nasdaq, once dominant on the tech list

David Velez, Nubank's CEO and co-founder. Photo: REUTERS/Brendan McDermid
Ler em português
  • NYSE only accepts listing companies with a minimum market value of $200 million;
  • In 2021 so far, the S&P 500 index has risen by about 25%. In the same period, Brazilian index Ibovespa dropped by more than 13%.

The New York Stock Exchange (NYSE) expects to receive several other listings of Latin American companies in the first half of 2022, encouraged by Nubank‘s initial public offering (IPO) on Thursday.

“We are talking to fintechs and consumer and healthcare companies,” the NYSE head of international markets, Brazilian Alex Ibrahim, told Reuters. “We are looking for companies that are changing the world.”

The statements come at a time when the US stock market has been showing signs of prolonged vigor, in the wake of the country’s interest rates close to zero, while in Brazil the combination of the Brazil‘s benchmark interest rate Selic’s escalation and political instability led around 70 companies to abort their debut plans at Brazil’s stock exchange B3.

READ ALSO: Brazilian startup Merama turns one year old and gets a unicorn as a gift

In 2021 so far, the S&P 500 index has risen by about 25%. In the same period, the Ibovespa dropped by more than 13%.

In this scenario, fast-growing Latin American companies that have already been looking forward to listing on the stock exchange since they emerged have seen in more robust markets, such as New York, a chance to reach a wider spectrum of investors.

It’s a dream for a relatively limited group of companies, given that the NYSE only accepts listing companies with a minimum market cap of $200 million and a minimum offering of $40 million, as well as “better governance,” the executive said.

But for the NYSE, this has been an opportunity to speed up contacts with more foreign companies, whose multiplier of stock offerings has led this year to a record $120 billion in public offerings, including about $2.6 billion captured by Nubank.

READ ALSO: Purple rain: Nubank debuts on NYSE as the most valuable listed bank in Latin America

Before the digital bank, the Brazilian e-commerce platform VTEX debuted there with an offer of US$ 360 million. In November, it was the turn of the technology company CI&T, from Campinas (SP), to raise $195 million in its IPO in that market.

And the focus on so-called unicorns — market jargon for startups with a market cap of more than $1 billion — has helped the NYSE take on its main rival Nasdaq, once dominant on the list of tech companies.

According to Ibrahim, around 72% of the listings of companies with this profile on US stock exchanges in the last 5 years were on the NYSE, including that of PagSeguro.

The executive does not reveal names of Brazilian companies that are in negotiation for a possible listing on the NYSE. But plans from companies such as Hotmart, Creditas, and the Elo card brand are already in use in the market.

The move comes at a time when a drawn-out trade dispute between the United States and China has led app transport giant Didi Chuxing to give up on having shares traded on Wall Street, a decision that could be followed by several other companies in the Asian country.

(Translated by LABS)

Get the best insights about Latin America market in your inbox