Chile: IPO party set to start next month

Taken from: http://blogs.ft.com/beyond-brics/2011/04/28/chile-ipo-party-set-to-start-next-month/

April 28, 2011 3:10 pm by Jude Webber Last year was a stellar year for Chilean stocks the Santiago Stock Exchange hit record turnover and volume highs; the IPSA and IGPA indices rose 37.6 and 38.2 per cent respectively to historic levels and the stock market announced an ambitious planned tie-up with its peers in Peru and Colombia to create the second biggest exchange by market capitalisation. This year, the trend-setting could continue in terms of the pace of offerings. A flood of more than $9bn in issues including secondary offerings and IPOs is expected this year, and it is likely to be one of the biggest years in terms of issuance that Chile has ever seen. The IPO party is set to start next month, with a $400m issue by pharmaceuticals firm CFR Pharma (the stock debuts on May 5) and salmon farmer AquaChiles $350 IPO during the month as well. Healthcare provider Cruz Blanca is planning a $200m deal in June, according to brokerage Celfin Capital. In all, there could be at least six to 10 issues if market conditions allow, a far cry from the more usual rate of one of two a year in recent years amid tight liquidity. As this Bloomberg story highlights such a deal pipeline would be the biggest year since 2005, when there were only IPOs. So what else is cooking? Another $600m in IPOs from issuers including Australis, a salmon farmer, food company AgroSuper and industrial, electronics and construction firms, plus a rash of secondary offerings and capital increases. Can the market take it? Growth might be dented if all the issues happen as Reutersreports here. But pockets here in Chile run very deep, says Celfins Nicky Courts, highlighting cash from all types of investors including mutual funds and pension inflows. Investors have had two very good years in the Chile market and dividend payments as well as capital gains and are looking for opportunities, she says .