SAO PAULO, April 7 (Reuters) - Banco Bradesco SA’s investment-banking arm is confident that improved investor sentiment may unleash a flurry of local bond and stock offerings that murky market conditions have held back for months, a senior executive said on Tuesday.
Congressional approval of President Dilma Rousseff’s spending-reduction package and decreasing currency volatility are among the possible events that should help rapidly unclog capital markets deals, said Renato Ejnisman, managing director for investment banking at Bradesco.
Bradesco BBI, the investment-banking unit of Osasco, Brazil-based Bradesco, is currently participating as advisor to 20 billion reais ($6.4 billion) worth of offerings that “are ready to be priced,” he said. Those deals include Telefonica Brasil SA’s capital increase that aims to fetch about 15 billion reais as early as this month.
Bradesco BBI is also advising on a number of mergers and acquisitions that could be announced as conditions improve, Ejnisman said.
The weak Brazilian economy and a 25 percent tumble in the real currency over the past year are driving down valuations and narrowing the gap between asking prices and bids, helping “prices for Brazilian assets turn more attractive,” he said.
Private equity firms, which are flush with cash as they fetch record amounts for their Latin American investments, will remain on the prowl to take advantage of declining valuations, he added. Ejnisman declined to discuss Bradesco’s flow of deals this year in mergers and acquisitions and capital markets.
$1 = 3.125 Brazilian reais Editing by Guillermo Parra-Bernal and Paul Simao