Technos SA, a Brazilian watchmaker, priced its initial public offering at the bottom of the proposed range as the country’s benchmark stock index trails gauges in the largest emerging markets this quarter.
Technos and its shareholders raised as much as 461.6 million reais ($293 million) at 16.50 reais a share after planning to price the stock as high as 20.50 reais, the company said in a regulatory filing yesterday. BR Properties SA, the property developer that sold shares to the public for the first time in March 2010, is raising as much as 690.3 million reais in a primary offering, according to a filing.
Rising interest rates and slumping share prices are holding back IPOs in Brazil, with companies scaling back or canceling sales. The Bovespa index is the worst performer among the so-called BRIC nations of Brazil, Russia, India and China this quarter, dropping 9.2 percent as the central bank raised benchmark borrowing costs by 1.5 percentage point this year to 12.25 percent.
“Even though the market is going through a rough patch, companies keep selling shares,” Joao Pedro Brugger, who helps oversee 70 million reais at Leme Investimentos in Florianopolis, Brazil, said in a telephone interview yesterday. “It could be a sign that the Brazilian market is more mature now, so companies decide to sell shares even if the short-term outlook doesn’t look very promising.”
According to a person familiar with the transaction who asked not to be identified because she isn’t authorized to speak publicly, 60 percent of the Technos sale went to Brazilian investors or international funds already in Brazil and 40 percent to investors outside Brazil. International investors typically take about 70 percent, said the person.
Twenty-one other Brazilian companies have raised 14 billion reais by selling shares this year, a 7.3 percent increase from the same period last year.
Itau BBA is coordinating Technos’ sale with Credit Suisse Group AG and Goldman Sachs Group Inc.’s local units.
BR Properties is selling as many as 40.3 million shares for 17.15 reais each, according to its filing. Itau BBA SA, Banco Bradesco BBI SA, Banco Santander Brasil SA and Banco J.Safra SA are coordinating BR Properties’ sale.