* Car rental company’s stock drops 4 pct after going public
* Public listing of BTG Pactual could reignite IPO interest
* Ernst & Young sees 20 new Brazilian listings this year
(Adds share performance, market study)
By Brad Haynes
SAO PAULO, April 23 (Reuters) – Shares of Brazilian car
rental firm Locamerica fell 4 percent on Monday in
their first day of trading, underscoring investors’ wariness of
the country’s first initial public offering this year.
The stock closed at 8.65 reais per share, down from the
selling price of 9 reais at Locamerica’s IPO last week. The
company had cut its IPO price from an original range of 11 reais
to 14 reais each in the face of scant demand for its shares.
The benchmark Bovespa stock index fell 1.5 percent
on Monday after weak growth data in the euro zone.
Locamerica entered a tepid market for new listings in Brazil
with a 313 million reais (US$167 million) share sale, ending
the country’s nine-month IPO drought.
Consulting firm Ernst & Young expects 20 IPOs in Brazil this
year, according to a study released on Monday. It maintained its
estimate for the year despite the lack of Brazilian listings in
the first quarter, when global IPO activity dropped 69 percent
from a year ago.
Analysts said it may take a successful share sale from a big
name such as investment bank BTG Pactual to revive
investor appetite in Brazil’s once-bouyant IPO market.
“It’s been a while since we saw companies opening on the
bourse with a big jump. IPOs haven’t been a good play for
short-term gains lately,” said Alexandre Ghirghi, a partner at
Metodo Investimentos in Sao Paulo. “With BTG that could change.
We might see the market gaining some steam.”
BTG Pactual and shareholders could raise up to 4.1 billion
reais in an initial public offering expected to price on
Tuesday, which may turn the investment banking powerhouse into
one of the world’s most valuable banks.
($1 = 1.88 reais)
(Reporting by Brad Haynes and Vivian Pereira)
