While 2013 was characterised by a hyperactive equity market in Mexico, buoyed by fairly positive signs from capital markets in Brazil, 2014 represented a gloomier affair. The region's two largest economies didn't report their first IPOs of the year until mid-year and both remained decidedly quieter than in the previous 12 months.

As many lawyers forewarned, 2014 was a quiet year for Brazilian equity markets, piqued as the worst year for IPO activity in more than a decade. After a pleasantly surprising 2013 that saw more IPO activity than previously expected, Brazil's downward macroeconomic mood appeared to take charge. External events played a part in capital markets' inactivity – June's FIFA World Cup clogged up deal flow as local and national governments geared themselves entirely towards making sure the event went off without a hitch, while many investors held off in displaying any interest in the country until after its much anticipated October presidential elections. One company that saw its IPO plans derailed by the socio-political commotion engulfing Brazil was meatpacker JBS, which ended up twice delaying the US$1.7 billion IPO it announced in May – the offering has yet to take place.

The re-election of Dilma Rousseff may not have been the outcome the business world was after, but the conclusion of the presidential battle and Rousseff's outline of the policies she plans to adopt in her new term at least offered a level of clarity to investors that had been absent before. To assuage investor doubts, the re-elected government will need to tackle inflation, curb government spending and lessen its intervention in heavily regulated sectors such as energy. If that doesn't happen, Veirano Advogados partner Carlos Alexandre Lobo sees capital markets adapting in two possible ways. "There is a possibility that due to this lack of enthusiasm by international investors we will develop a local investor base for smaller IPOs subscribed by domestic investors," he says. Regulatory changes recently amended a rule that restricted offerings to qualified investors only, which would contribute towards this. Secondly, companies may start pursuing dual listings in both Brazil and either London or New York more aggressively so that they can access a larger pool of investors. Brazilian airline Azul is pursuing that strategy and has filed a request with the US and Brazilian securities regulators.

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