Banco Pactual SA, the top manager of stock offerings in Brazil, expects a surge in initial share sales by yearend as interest rates fall, said Rodolfo Riechert, a partner at the investment bank.

"We continue to be very optimistic for the Brazilian stock market," Riechert, whose bank managed five of Brazil's seven IPOs in 2004, said in an interview in Sao Paulo. "A lot of companies have already filed with the securities regulators for IPOs and that gives us a positive outlook from here on."

The Rio de Janeiro-based bank expects five more companies to register for initial public offerings this year in addition to the four that already have filed - TAM SA, Brazil's second-biggest airline, utility Energias do Brasil SA, J.C. Penney Co. unit Lojas Renner SA and toll road operator Obrascon Huarte Lain Brasil SA. Three companies had IPOs already this year.

Brazilian companies, which revived initial share sales in 2004 after a two-year pause, are seeking to raise capital on the stock market even as this year's IPO shares underperform Brazil's benchmark Bovespa stock index.

The index fell 9.8 percent since reaching a record high March 7. Shares of Internet retailer Submarino SA have dropped 14 percent since the company's March IPO, and shares of apple producer Renar Macas SA fell 33 percent since they began trading in February. Localiza Rent a Car SA, which had its IPO May 23, is up 0.8 percent from the sale price.

(From Bloomberg, June 2, 2005)
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