Recently, a senior analyst covering Latin America was lured by an investment bank from New York to Săo Paulo. The analyst may not have seemed an obvious choice for such a position, being neither Brazilian nor a Portuguese speaker. For the analyst, the salary was the driver; for the bank, it was his expertise. This reversal of the normal flow of talent is symptomatic of a market that is in runaway expansion. Local banks that are flush with cash from lending want in and, in some cases, are matching packages offered by the global banks. That is encouraging further salary inflation and a revolving door mentality.
Brazilian equity markets are running at full tilt: issuance is the third highest on the planet so far this year (after the US and UK). That is a spectacular ramp up. In 2005, just nine companies launched initial public offerings (IPO) on the Bovespa exchange, raising $2.1bn. Last year, 26 such deals raised $7.1bn and the Ibovespa, the most widely quoted benchmark, was up 33%. By mid-May this year, there had been 21 IPOs.