The end of electoral uncertainty begins to change the mood of businessmen and investors in Brazil. Over the past two weeks, since the election of the President of the Republic, Jair Bolsonaro (PSL), companies have been plotting, in the recent months, plans, either investments, mergers and acquisitions and the marketing of market shares (IPOs). Some investment notices have already been published a few days after Bolsonaro was announced for the next inhabitant of Planalto Palace. But optimism comes with a warning: it is necessary to move forward with economic reforms.
Last week, entrepreneur Carlos Wizard Martins, a former owner of the English school wizard and now owner of the Sforza Network, which includes companies like Mundo Verde, KFC and Pizza Hut, said he plans to pay $ 1.6 billion a year. The second contract, which during the months of talks between the investment bank, signed the purchase agreement only a few days after the election: the purchase of 22% of the Madero network by the US Carlyle fund. The contribution of 700 million dollars was after the 24-month "post" of the fund in the country.
Major Brazilian banks have improved their prospects for the Brazilian economy: Bradesco now expects Brazil's gross domestic product (GDP) to grow by 2.8% in the coming year (before, presumably 2.5%), while Itaú Unibanco up to 2.5% (less than 2% before). Chief Economist of Itaú Unibanco Mário Mesquita says that the market's mood has changed over the past weeks: "We see that the number of consultations to close the business has increased greatly, as it is felt that the fixed and variable income markets have been reopened by Brazilian companies."
Promoting. If there is optimism in commercial banks, some investment banks feel that the following year has excellent opportunities. At Brasil plural, the estimate of GDP expansion for 2019 was revised to 3.5%. In order to achieve this goal, except for the president of the institution, Rodolfo Riecherta, the pension reform must be confirmed. According to the executive, Previdência became a "symbol" of the continuation of Brazil. Therefore, in his view, the fight against the pension deficit should be "no priority" for the new administration.
Brasil Plural operates on IPO Bank BMG, one of the first initial share offers, which were confirmed for December. And Riechert says that projects that were in "bain-marie" since the end of October, also the help of the IPO of two medium-sized technology companies, have again become hot. "We are also looking for real estate fund managers who want to expand their platform here in Brazil," says the CEO.
Although I agree that the mood of the market has changed for the better, Pinheiro Neto Advogados CEO Fernando Alves Meira, director of mergers and acquisitions, said, but "some exaggeration", especially investment banks. "There are those who bet on 30 stock exchanges the following year," he says. Nevertheless, he believes that measures such as social security reform and the central bank's independence have boosted growth in the Brazilian economy over the coming years in the coming years. % to 3% "without much surprise".
Partner Partner Vinci partner José Guilherme Souza says some indicators point to a slightly more favorable scenario for new business. He emphasizes that it is difficult to talk to the foreign investor before the elections. At the end of political uncertainty, the manager was already looking for a sovereign fund to discuss new strategies in the Brazilian market and was expected to meet with foreign investors at the end of the month. "This is a good sign after the paralysis that we experienced during the election period."
Entities. Continuing optimism can also be seen in market confidence indices. Consumer expectations indicator reached the highest level since October 2014, estimated by the National Confederation of Industry (CNI). Last month, the industry showed renewed optimism after the fall of September.
"We see that many people are still waiting, but the fact that we have a president and a particular congress already helps to unlock some of the investments," says Marcela Kawauti, chief economist at Credit Protection Service (SPC Brazil). In her opinion, until the election, retailers avoided even urgent reforms. "Now, at least, these works are being implemented," Marcela adds, noting that a stronger shift in reinvestment will come only through concrete measures that will be taken by the new government.
Claudio Conz, president of the National Building Materials Manufacturers Association (Anamaco), says humor has improved considerably in the sector at the end of the election and has encouraged some companies to unburden projects. "Our expectation will grow by 6.5% and 10% by 2019. The end of the elections brought a lot of concern that took over businessmen."