(Bloomberg) -- Latin America’s equity capital markets are expected to rebound in next year’s final two quarters because interest rates may start to fall in some countries, according to Goldman Sachs Group Inc.’s head of that business for the region.
“I think there’s going to be a lot of activity in the second half of 2023,” Facundo Vazquez said in an interview in New York. “The region is in a better position to take advantage of interest-rate cuts because it started to raise rates more than a year ago, before the US, and in certain countries inflation is peaking or even starting to come down.”
Latin American equity sales plunged 63% so far this year, to $11.6 billion, according to data compiled by Bloomberg. After Brazilian companies raised more than $16 billion through initial public offerings in 2021, the figure dropped to zero this year. Mexican companies haven’t completed an IPO since January 2018, Facundo said.
Russia’s invasion of Ukraine has also brought “competitive advantages” to Latin American nations, as many benefit from higher commodity prices such as oil, soybeans and metals, and also may see investment inflows previously targeted to Russia or China.
“What also makes me a little optimistic for the next couple of years is that when we have these commodities super-cycles, emerging markets tend to do well, and obviously you see capital flow into the region,” Vazquez said.
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