Brazil’s Depressed Valuations Drive Wave of Stock Delistings
Depressed valuations and stagnant trading volumes are pushing a growing number of companies to go private in Brazil, further eroding the country’s weight in global equity portfolios.
Stock exchange B3 SA has seen 33 companies delist since 2024, according to data compiled by Bloomberg. At least six new tender offers have already been announced, including for Banco Santander Brasil SA, Companhia Brasileira de Aluminio SA and Helbor Empreendimentos SA.
Investment bankers, investors and B3’s executives blame several factors for the exodus. Chief among them are Brazil’s stubbornly high interest rates — with the Selic above 10% since 2022, there’s little to put up with volatile equities. Instability from the war in the Middle East, the AI boom in the US and Asia are also seen as drawing money away from the country.
“The Brazilian stock market has been going through a particularly challenging period,” André Milanez, B3’s chief financial officer, said in an interview. Next month’s presidential elections present a further complication, he added. “Naturally, market participants prefer to wait before making moves.”
Adding to the woes is that the pipeline for Brazilian initial public offerings has been bare for years. In May, Compass SA became the first to do so since 2021, and bankers say there are no companies expected to debut this year.
Acquisitions also explain part of the trend, said Fabio Nazari, head of equity capital markets for Banco BTG Pactual SA. According to Brazilian law, when a new shareholder takes control of a company, it must do a tender offer to buy out all minority shareholders at the same conditions.
That’s the case of Companhia Brasileira de Aluminio, which is being acquired by China’s Chinalco and Rio Tinto. Santander Brasil, whose valuations are at record lows compared to the parent company in Spain, will be part of a tender offer through a share exchange expected for the first half of 2027. BTG did a buyout of subsidiary Banco Pan in January. Grupo Indiana is incorporating unit Neogrid, a tech and software company, while real estate firm HBR Realty Empreendimentos Imobiliários SA is taking up Helbor Empreendimentos SA as subsidiary and delisting it.
“If a stock is trading below book value, the best use of the controlling shareholder’s money is to buy the stake held by the market, which has ceased to be a good partner,” said Daniel Wainstein, founding partner at investment banking boutique Seneca Evercore. “A low share price prevents the company from raising further equity capital, and yet remaining a publicly traded company entails a huge amount of work.”
Claudia Mesquita, head of Brazil Equity capital markets at UBS BB Investment Banking, sees the delistings as “a natural consequence” of the boom of 2020 and 2021, which brought in IPOs from “issuers at various stages of maturity.”
Trading in Brazilian equities has dwindled since its 2021 peak, with average daily turnover falling nearly 32% to 20.7 billion reais ($4 billion) in 2025, according to B3 data. Volumes rebounded this year ahead of the election and as foreigners diversified away from the US, averaging 26.8 billion reais through July, but remain below levels seen around the boom.
The reduced amount of companies keeps traders confined to a small number of liquid shares that tends to yield only average returns, said Christian Keleti, Alpha Key Capital’s chief executive officer.
“As asset managers have the same names in their portfolio, they lose their competitive edge,” Keleti said.
Similar trends have been playing out across Latin America’s main markets. The number of listed companies in Mexico and Colombia fell about 3% since 2024, while in Chile the decline was 1.6%, according to exchange data compiled by Bloomberg. Smaller markets in Argentina and Peru saw growth of at least 3.7% in the span.
In Brazil, the decline was steeper — 9%.
“The more recent wave of delistings is more of a Brazilian phenomenon, because valuations are more depressed here,” said Bruno Saraiva, co-head of Brazil investment banking and head of equity capital markets for Latin America at Bank of America.
Brazilian stocks have traded at lower valuations than most Latin American peers for years. They’re currently at 8.88 times estimated earnings, roughly 26% below the average for the region and about 11% below their 10-year average.
The cheap valuations drew foreigners early in 2026 — a flow that quickly reversed when the war in Iran sent oil prices surging and reshuffled bets on global interest rates. Locals continue to withdraw money, with equity funds seeing 8.15 billion reais in outflows this year through August.
“There’s an overall frustration and disappointment regarding Brazil,” said Marcelo Millen, head of Latin America equity capital markets at Citigroup. “There was an expectation to reach the end of the year with lower interest rates, but that is not going to materialize.”
Prospects for IPOs this year seem more favorable elsewhere in Latin America. Argentina’s YPF Energia Electrica SA and Genneia SA filed for US deals, with dual listings in the local exchange. Colombia’s “ignored” equity market may get a boost from a new government, Millen said, while Chile’s lower rates and controlled inflation make it “the best-positioned” in the region.
— With assistance from Vinicius Andrade
Published on 09/15/2026 and available at:
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