Itau BBA predicts Brazilian fixed income issues to rise this year, M&A volume stable By Reuters

SAO PAULO (Reuters) -Executives of Itau Unibanco Holding SA wholesale unit Itau BBA said on Monday they expect Brazilian companies to issue more fixed income instruments this year and sell less equity, as markets prepare for pre-election volatility.

Itau BBA director for corporate and investment banking, Cristiano Guimaraes, predicted at a news conference that the volume of equity issues to fall this year and a rise in the sale of fixed income instruments. He added he expects M&A volume to be stable in 2022 compared to last year, as Brazilian companies will use proceeds of large share issues last year to acquire rivals.

Despite higher volatility, some transactions are going well in the equity capital markets, Guimaraes said. Local investors are more cautious, but foreigners are coming back to the markets and some selected IPOs may be completed, he added.

The slower activity in equity capital markets this year is expected to be offset by growth in fixed income and more business in the agricultural division, with the sale of more credit instruments, funds specific to the industry and more trading activity.

Itau BBA plans to hire up to 120 people in the agriculture division, and rise its total headcount in the unit by 200 people from the current 2,100 employees, its CEO Flavio Souza said.