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By: Carolina Millan
Argentina’s IPO market hasn’t had quite the jolt some investors were expecting.
A year and a half after President Mauricio Macri took office, new share sales are slow to take off. Just one company has completed an international initial public offering. The delay comes as private companies wait for their valuations to rise, while taking advantage of their low leverage: Argentine corporates sold about $10 billion in debt over the past 18 months while Merval index valuations are trading at a relatively low level versus their MSCI emerging market peers.
"Issuers are looking to see if their valuations are the highest they can be," said Daniel Patron Costas, head of investment banking at Banco Santander Rio SA. "The IPO boom might not be in 2017, but 2018 should be the key year."
About a dozen new share offerings are expected over the next 18 months, mostly in 2018, and in particular in the energy, infrastructure and agribusiness sectors, he added. Santander Rio’s investment banking unit headcount rose "significantly" in the past year and may continue to grow as activity rises.
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