The warning came from the president of the largest bank in the West, JPMorgan Chase. At an event last Wednesday (1st), Jamie Dimon did the math: in 1996, the US had thousands more companies than it does today.
“I’m begging you to think about it on the way home,” said the CEO of JPMorgan, for whom the number should have reached 14,000 by now, but it’s not even half that.
And what happened along the way? These companies are being acquired by closed funds and private equity companies, that is, privately held. In his view, this exit from the listed market is due to excesses of litigation, regulation, exposure in the press, governance requirements…
The shrinkage of the market ends up even harming pension funds, which are so important to the US economy, and the maturing of the investor market as a whole, says Dimon.
In Brazil, we experienced an increase in the last year, in the so-called window of initial public offerings (IPOs), and currently we have 453 companies trading their shares on the Stock Exchange. In 2019 there were 390, but looking back, we see that in 1998 there were 599.
And see what an immediate scenario is discouraging for the entrepreneur to seek capital on the stock market and for the investor to bet on companies. We are fighting inflation by stifling the economy. The idea of consecutive interest rate hikes is precisely to slow down economic growth. And the so-called contractionary policy is having an effect. First quarter GDP grew by only 1%, below market expectations.
While the Stock Exchange scenario brings little enthusiasm for large gains in the coming periods, the Brazilian market starts to take more seriously options for those who want to bet on entrepreneurship and try to seek high returns, accepting higher risks.
Now, companies are trying to create sorts of “access groups” to the financial market. The idea is to allow companies that do not meet all the requirements to be listed on the stock exchange to test their growth theses in the market.
The process has been extremely cheap with technology such as blockchain for asset tokenization. In other words: the transformation of products already known in the financial market (such as debt securities or shares) into digital assets that can be divided and traded.
Thus, instead of opening their shares on the stock exchange, companies can make a kind of IPO in the digital market.
In the so-called sandboxes of the Securities and Exchange Commission (CVM) and the Central Bank, a controlled environment, for monitoring by regulatory bodies, some platforms are already preparing their operations to issue tokens to investors.
A study released by the main financial market entity, Anbima (Brazilian Association of Financial and Capital Market Entities), on the 26th, cites that the possible impact of tokenization is the very expansion of market liquidity (more people trading assets) .
The technology “allows the creation of new investment products and the development of markets for new assets, enabling the negotiation and commercialization of assets that have little liquid markets (such as fractions of renewable energy)”, exemplifies the study.
The document cites initiatives being tested in Brazil, such as Bolsa OTC and Vórtx QR Tokenizadora, which want to fractionate debt securities, investment fund shares and shares, for example, to resell to small investors. A kind of “access market” for smaller companies, like another project that is in the oven, BEE4, which wants to sell tokenized shares, in a new crowdfunding model.
While, on the one hand, the CEO of JPMorgan shows that investors have fewer options on the stock exchange than they should, on the other hand, a new market begins to take shape, bringing “real world” companies to the world of tokens, closely monitored by the financial market authorities. Thus, windows of opportunity are opened for those seeking greater possibilities of gain in exchange for greater risks. After cryptocurrencies, the market prepares for “cryptotions”.
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I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
