Brazil Stocks Will Correct Down during 2010, UBS’s Cremoux Says
Brazil’s stock market is forming a “bubble” and may suffer a “correction” next year as valuations soar, according to Gerard Cremoux, co-head of Latin America investment banking at UBS AG.
The increase in companies issuing shares shows that Brazil’s stock market is becoming overvalued, Cremoux said. OSX Brasil SA delayed and cut an initial public offering last week that was originally planned to be the biggest in the world this year. Petroleo Brasileiro SA may raise $15 billion to $25 billion in a planned share sale, Chief Executive Officer Jose Sergio Gabrielli said this week. The share sale may climb to $35 billion, Cremoux said.
“Brazil looks like a bubble,” Cremoux said at Columbia University in New York. “The market expects a lot of activity in Brazil this year. We might see the biggest equity offering ever. You can become a bit skeptical.” READ MORE HERE