A fourth wave of foreign investment is reshaping Brazil's capital markets
Once each decade or so, Brazil finds itself at the threshold of a new chapter in its relationship with global capital — and Bank of America believes that moment is arriving again. Projecting at least ten IPOs from Brazilian companies by mid-2027, the bank sees a fourth wave of foreign investment converging with post-election clarity, a weakening dollar, and equity valuations that make Brazil look underpriced beside its emerging-market peers. The promise is real, but so are the conditions: fiscal discipline at home and falling interest rates abroad must both materialize for the cycle to fully turn.
- Brazil's capital markets are stirring after years of uncertainty, with three companies already public in 2026 and a pipeline of ten or more IPOs projected before mid-2027.
- Global giants like OpenAI and SpaceX are entering public markets at the same time, threatening to absorb the very investor capital that Brazilian listings need to succeed.
- A May geopolitical shock briefly drove foreign money out of Brazil, spiking inflation and borrowing costs — a reminder of how quickly external forces can derail domestic momentum.
- Brazil's stock market trades at roughly nine times earnings against India's twenty-one, making it one of the more attractively valued emerging markets and a potential magnet for rebalancing flows.
- Sectors from sanitation to fintech are lining up for 2027 access, while M&A activity is expected to stay elevated as special situations funds help companies restructure under pressure.
- The entire outlook hinges on two variables: whether Brazil's government holds to fiscal adjustment, and whether global central banks deliver the rate cuts the market is pricing in.
Bank of America is projecting a meaningful revival in Brazilian capital markets, forecasting at least ten IPOs from Brazilian companies — listed domestically or in the United States — by mid-2027. The bank frames this as part of a fourth wave of foreign investment into Brazil, a pattern it traces back through the commodity boom of the mid-2000s, the reform cycle of 2015, and the post-pandemic liquidity surge of 2021.
Three companies have already gone public in 2026: PicPay and Agibank launched in the U.S., while Compass listed in Brazil. Bruno Saraiva, who co-heads BofA's Latin American investment banking and equity operations, sees 2027 as the real inflection point — provided the Brazilian government follows through on fiscal discipline once the election cycle has passed. External tailwinds are also aligning: the dollar is weakening, global central banks are expected to cut rates, and inflation remains contained.
The bank is candid about the risks. Major U.S. listings from OpenAI, Anthropic, and SpaceX will compete for the same pool of global capital, and Hans Lin, another senior BofA banker, warns they could draw liquidity away from smaller Brazilian offerings. A brief geopolitical shock in May already demonstrated how quickly foreign money can exit Brazil, pushing up inflation and borrowing costs in its wake.
Still, the fundamentals carry weight. Brazilian equities trade at roughly nine times earnings — strikingly cheap compared to India's twenty-one times multiple — and are underweighted in emerging-market funds relative to historical norms, leaving room for significant rebalancing inflows. Sectors positioned for 2027 listings include real estate, consumer goods, infrastructure, retail, and fintechs, with the sanitation sector drawing particular attention: Copasa is planning a secondary offering that could raise up to ten billion reais, and BRK Ambiental is preparing its own debut.
On the M&A side, Diogo Aragão, who leads the practice at BofA, expects special situations funds — rather than traditional private equity — to drive deal activity as companies work through balance sheet stress. Foreign corporate debt issuance faces a harder road: recent restructurings at Raízen and Ambipar have made investors cautious, and the bank projects overseas debt issuance this year at around twenty-one billion dollars, well below last year's forty billion.
The overall picture is one of genuine but conditional optimism — real tailwinds in valuation and foreign flows, real constraints in global capital competition and debt market wariness. The IPO cycle Brazil is hoping for is within reach, but it will require both political follow-through and favorable global conditions to fully arrive.
Bank of America is betting on a significant rebound in Brazilian capital markets over the next year and a half, projecting at least ten initial public offerings from Brazilian companies—whether listed domestically or abroad—by the middle of 2027. The bank's optimism rests on what it sees as a fourth consecutive wave of foreign investment flowing into Brazil, a pattern that has repeated roughly every decade since the mid-2000s.
So far in 2026, three companies have already gone public: PicPay and Agibank launched in the United States, while Compass listed in Brazil. Bruno Saraiva, who co-heads investment banking and oversees equity markets for Latin America at BofA, frames the coming period as a turning point. The real acceleration, he argues, should arrive in 2027—but only if the Brazilian government follows through on fiscal discipline. The election cycle, which has created uncertainty, will have passed. Global conditions are also shifting in Brazil's favor: the dollar is weakening, central banks are expected to cut interest rates, and inflation remains contained.
The bank acknowledges real headwinds. Major U.S. listings—OpenAI, Anthropic, and SpaceX among them—will compete for the same pool of investor capital. A brief spike in geopolitical tension over Iran in May caused foreign money to leave Brazil temporarily and pushed up inflation and borrowing costs worldwide. Hans Lin, another investment banking leader at the firm, notes that these global IPO giants could siphon liquidity away from smaller Brazilian offerings.
Yet Saraiva sees the fundamentals as solid. Foreign investment flows remain robust despite the May outflow, and he describes what's happening as a genuine fourth wave—comparable to the commodity boom cycle of 2005 to 2008, the structural reforms and government change of 2015 onward, and the post-pandemic liquidity surge of 2021. The Brazilian stock market, trading at roughly nine times earnings, looks cheap compared to India's market, which trades at more than twenty-one times earnings. Brazilian equities are also underweighted in emerging-market funds relative to their historical average, suggesting room for rebalancing inflows.
The sectors positioned to tap public markets in 2027 span real estate, consumer goods, infrastructure, and retail. Technology companies and fintechs have already proven they can access U.S. markets—though Saraiva notes that American listings require a minimum raise of around five hundred million dollars to justify the effort. The sanitation sector is another bright spot: Copasa is planning a secondary offering that could raise up to ten billion reais through privatization, and BRK Ambiental is preparing its own listing. The demand for infrastructure investment in water and sewage is substantial and durable.
Mergers and acquisitions are expected to stay active in the near term as companies restructure their balance sheets. Diogo Aragão, who leads M&A at BofA, expects special situations funds—rather than traditional private equity—to drive much of this activity. Corporate debt issuance abroad, however, faces headwinds. Recent restructurings at Raízen and Ambipar have made investors wary. The bank projects that foreign debt issuance this year will total around twenty-one billion dollars, well below last year's forty billion, with further slowdown likely in the second half as global conditions cool.
The picture that emerges is one of cautious optimism: real tailwinds from valuation, foreign flows, and improving political clarity, but also real constraints from global capital competition and debt market caution. If fiscal reform holds and global rates fall as expected, Brazil could see a genuine IPO cycle. If not, the projections will need revision.
Notable Quotes
In 2027, the scenario tends to improve, but it requires commitment to fiscal adjustment— Bruno Saraiva, co-head of investment banking at Bank of America
We are living through a fourth wave of significant foreign investment flows to the Brazilian stock market in the last twenty years— Bruno Saraiva
The Hearth Conversation Another angle on the story
Why does Bank of America think now is the moment for Brazilian IPOs? What's changed?
The election uncertainty is clearing. That matters psychologically. But more than that, they're seeing a pattern repeat—foreign money flowing into Brazil in waves, and this is the fourth one in twenty years. The previous three happened after commodity booms, after reforms, after the pandemic. Each time, investors came back.
But doesn't the Iran situation and rising rates globally work against that?
It does, temporarily. Money left Brazil in May. But the bank's view is that once that geopolitical noise settles, rates will fall again and capital will hunt for returns in cheaper markets. Brazil trades at nine times earnings. India trades at twenty-one. That gap is the whole story.
So it's just valuation arbitrage?
Not just. It's also that Brazilian equities are underweighted in emerging-market funds. There's a mechanical rebalancing that could happen. Plus the government needs to prove it's serious about fiscal discipline. If it does, that unlocks confidence.
What about the big U.S. IPOs—SpaceX, OpenAI? Won't those suck up all the capital?
They will take some. But the bank thinks there's enough liquidity for both. The real constraint is that American listings need to be at least five hundred million dollars to make sense. Smaller Brazilian companies can't compete there. They'll list at home or stay private longer.
Which sectors are actually ready to go public?
Tech and fintechs have already proven it works—PicPay and Agibank did it this year. Real estate, consumer, infrastructure, and retail are next. Sanitation is hot because the demand for investment is real and long-term. Copasa alone is planning to raise ten billion reais.
And if the government doesn't follow through on fiscal reform?
Then the whole thesis falls apart. The bank is explicit about that. 2027 improves only if there's commitment to the numbers. Without it, you're back to waiting.