Goldman, Morgan Stanley gain clout in Brazil as NY IPOs grow

SAO PAULO (Reuters) – Goldman Sachs Group Inc (GS.N), Morgan Stanley(MS.N) and Bank of America Merrill Lynch(BAC.N) are regaining clout in Latin America’s largest economy as Brazilian companies opt to list shares in New York instead of on their local exchanges, Refinitiv data shows.

A sign is displayed on the Morgan Stanley building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson

U.S. banks advised on 56 percent of Brazilian share offerings this year, the data shows, after trailing local banks last year with only 29.7 percent. That means American banks have grabbed a much higher portion of the $280 million in fees paid by Brazilian companies so far this year.

About 27 percent of that went to Goldman Sachs, which managed the country’s two largest IPOs of the year: card processing companies PagSeguro and StoneCo Ltd, which listed on the New York Stock Exchange and Nasdaq respectively, followed by Morgan Stanley, with 21 percent.

PagSeguro Digital Ltd’s (PAGS.N) listing in particular was pivotal to convincing Brazilian companies they could win better valuations abroad, bankers say.

The credit card processor is valued at $6.8 billion, ahead of its largest competitor, Cielo SA (CIEL3.SA).

PagSeguro, which describes itself as a “financial technology solution company” was compared by its bankers to companies like digital payments platform PayPal Holdings Inc (PYPL.O), which trades at over 45 times earnings.

Even after its shares swooned following its third-quarter earnings report, PagSeguro still trades at 24 times earnings, more than triple Cielo’s multiples.

The offering showed the benefit of a U.S. listing for companies with a strong

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