Latin American capital markets practices booming with $4bn raised in 2018

IPO activity increasing in Mexico and Brazil despite political concerns – Mexican stock market has accounted for 58 per cent of total capital raised in the region

Demand for legal advisers with capital markets expertise is booming in Latin America, with data from Baker McKenzie’s Cross-Border IPO Index showing that $4 billion of capital was raised in the region in the first half of 2018, an 88 per cent increase on the previous year. Growth is being fuelled by an expanding consumer class, greater investor confidence thanks to stabilising markets, as well as a perception of growing pro-business governments in the region.

Pablo Berckholtz, partner at Baker McKenzie (pictured) and head of the firm’s Latin America capital markets practice group, says economies in the region are becoming more diverse, with more activity in sectors such as energy, mining, infrastructure, healthcare, pharmaceuticals, transportation and technology.
There has been an increase in IPO activity in Mexico and Brazil despite concerns related to trade and internal political matters, Berckholtz says, with the Mexican stock market accounting for 58 per cent of the total capital raised in the region. Meanwhile, he adds that it is anticipated that there will be notable IPO activity in Argentina. “If the pro-business economic reforms are passed in the legislature, we can expect to see significant growth and greater investor excitement in Argentina too.”

The Baker McKenzie Report notes that the listing of Argentinian company Corporación America Airports (CAA) was the only Latin American cross-border listing made in the first half of the year – it raised a total of $485 million on the New York Stock Exchange. For this deal, Marval and Linklaters acted for the underwriters while Greenberg Traurig and M&M Bomchil advised the issuer.
Roberto Silva, partner at M&M Bomchil, says there had been a steady increase in IPOs in Argentina in 2017 and early 2018, but the current financial turmoil in the country means capital market transactions have now come to a standstill.