Brazilian companies raised R$105.2 billion in the local capital market in the first quarter of 2022, the association of securities firms Anbima said. This is an all-time-high amount for a first quarter since records began.
Fixed-income issues stood out amid double-digit interest rates. Companies raised R$93.5 billion through bonds and other instruments between January and March. The volume was 32.2% higher than in the same period in 2021. On the other hand, the equity segment saw a strong contraction. Stock issues totaled R$11.7 billion from January to March, down 63.6% year over year.
“The high interest rates and the migration of funds to fixed income hinders variable income,” Anbima’s vice president José Eduardo Laloni said. Bonds stood out among instruments with R$55.9 billion raised in the quarter, up 80.6% year over year.
Rising interest rates over the past year “reflected in the capital markets as a whole,” Mr. Laloni said. While Brazil’s benchmark interest rate Selic reached double-digit levels, fixed-income fundraising prevailed in the first quarter of 2022, he said. “It was a record volume for the first three months of the year.” Mr. Laloni also pointed out that the interest of issuers and investors is gaining steam because the secondary market for bonds is on the rise. “We have a very active secondary market now, with many intermediaries participating in the primary issue and then selling in the secondary market.”
The financial volume in the secondary bond market totaled R$62.7 billion in the first quarter of 2022. It was the second-highest quarterly volume in the last two years – up 58.7% year over year.
The executive also pointed out as a highlight in 2022 the issues of commercial notes. “These bonds started to be issued in 2021, with a volume of R$2.7 billion last year. In the first quarter of this year alone, we already have almost R$10 billion of funding,” he said. Anbima also sees fundraising in the foreign market with lower demand compared to recent years. “The foreign market was also weak [in the first quarter] because first quarters are typically the window of external funding,” he said.
Brazilian companies raised $3.8 billion between January and March 2022. In the same period last year, the figure reached $7.6 billion.
Source: Valor International