Vice president of the American technology exchange Nasdaq, Bob McCooey predicts that between 6 and 12 Brazilian companies will go public (IPO) in the United States throughout 2023.
He recognizes, however, that the timing is not yet ideal for listing new shares due to the ongoing interest rate hike by the Federal Reserve (Fed, central bank of the United States), which has increased volatility in the technology market.
The executive also says that, regardless of who wins the elections in the country, the most important thing is that the government encourages the development of new businesses and the emergence of entrepreneurs who create companies with the potential to grow and can consider an IPO in the future.
“As long as support continues for entrepreneurs and for new businesses to develop, it doesn’t matter who wins the election.”
How has the conversation been with Brazilian companies interested in making their IPO on Nasdaq? It’s been very interesting. We are reaching a stage where Brazilian companies have a profile closer to what we have at Nasdaq, with entrepreneurs creating innovative, disruptive businesses. These are technology companies, fintechs, areas in which Nasdaq is very strong. We have seen a very expressive evolution. Until 2017, there were no Brazilian companies listed on Nasdaq, and now we already have a number of Brazilian companies with shares traded. This week we even had a listing from Semantix, which has a fantastic artificial intelligence business developed in Brazil. It’s the typical company profile that we want to become part of the Nasdaq ecosystem.
Based on conversations that Mr. maintains with Brazilian companies, how many should IPO on Nasdaq in the coming years? There is a strong market in the country through B3, but there will be companies that will choose to list outside of the local market, and when these companies take this initiative on their own, we firmly believe that Nasdaq is the best partner for them. My expectation is that, as the market recovers, between 6 and 12 Brazilian companies will IPO in the United States next year.
Brazilian companies in which sectors should IPO on Nasdaq? Technology companies in general. Fintechs, education technology companies such as Arco and Afya, and we also recently saw two private equity firms going public on Nasdaq, Vinci and Pátria. People often think of Nasdaq primarily as a technology market, but we are a market with a very high level of business diversification. We also have a very strong presence in the health and biotechnology sectors. And even in the consumer sector, with companies with global operations like Starbucks.
What is the perception of global investors about Brazilian companies? I think they see fantastic entrepreneurs building amazing businesses in Brazil. They can differentiate between entrepreneurs who are building their businesses in Jakarta, Seoul, Silicon Valley or São Paulo. If it is a good deal, investors will want to be involved, whether investing in these companies when they are still at an early stage as a privately held company, or when they go public through the IPO, depending on the profile. performance of each investor. There is a large ecosystem of technology companies that are being incubated and growing in Brazil, we are still very excited and I have no doubt that global investors are also excited.
What is your view on the Brazilian market at the moment? Brazil is still at the beginning of a long phase of growth, but, at the same time, it is already well ahead of a number of other countries developing an ecosystem of entrepreneurship and technology to support all these large companies that are emerging. There are entrepreneurs who are succeeding in growing their business, and who start investing in new businesses, creating a positive cycle for the emergence of new players in this market. It’s a phenomenon that’s been happening for 40, 50 years in Silicon Valley, and it’s something that seems to be happening in the same way in São Paulo.
Can uncertainties about the country’s elections and the region’s economy in 2023 encourage companies to go public abroad? I find it difficult to comment on the political situation in the country, I don’t know enough about that. Depending on the people I talk to, some think Lula will return to the presidency, others think Bolsonaro is the one who will win. As long as the support continues for entrepreneurs and for new businesses to develop, it doesn’t matter who wins the election. As long as the elected officials do not interfere with this evolution that has begun to take place over the last few years in the country, the region will continue to be a great place for the emergence of new businesses.
Why should Brazilian companies consider IPOs on Nasdaq, rather than listing on B3 or other American exchanges such as NYSE (New York Stock Exchange)? If the company chooses to list outside the country, we understand that Nasdaq is the best option. That’s because of the other companies traded with us that will be associated with it, Nasdaq-listed companies have defined the global economy over the last 25 years. In addition, we provide better liquidity for companies that choose to IPO on Nasdaq, support companies that want to go public through investor relations, and charge lower fees than our competitors.
We have seen an increase in volatility for tech stocks as interest rates rise by the Federal Reserve. Does this process tend to inhibit new IPOs by Brazilian companies on Nasdaq? The current scenario slows down all IPOs more broadly, not just in relation to Brazil. It is something that affects the IPOs of companies in Israel, Southeast Asia, Europe, the United States, and delays this process, but does not completely eliminate it. The market is difficult at the moment, we are expecting it to become more stable, more receptive to IPOs, and when that happens, I know that Brazilian companies that are already prepared will take advantage of investor appetite. But the market must be open to receive them.
When can we expect a change in market mood? When will the Fed end the rate hike process? We would all like to know when that will happen. We had news this Friday (5th) indicating a strong job market in the United States, which tends to generate a selling force in the market and increases the pressure on the Fed. We will have to wait and follow the evolution of the scenario. There are a number of companies around the world that are waiting for the market to reopen and become more receptive to doing their IPOs, and in the meantime, they have to keep doing their job. It will take one or two successful IPOs to restore confidence for companies to resume their plans to go public.
The market was in a very positive moment from mid-2020 to the beginning of this year, but unfortunately the market does not always go up. I know it’s very frustrating for companies preparing for this, but they have to keep doing their job and at some point the market will recover.
X-ray | Bob McCooey, 55
Bob McCooey is Vice President of Nasdaq, responsible for leading business development for new listings in Latin America and the Asia Pacific region. With 16 years at Nasdaq, he has held various positions in the company’s new listings and capital markets. Prior to joining Nasdaq, McCooey founded and served as CEO of brokerage The Griswold Company. From 2003 to 2006, he was also a member of the Board of Directors of Nyse (New York Stock Exchange), the New York Stock Exchange.
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.
