Back to the future

11 December 2019 By Anna Szymanski Follow @Three_Guineas

Upstart XP is the year’s fourth-largest U.S. listing. It can still charge real fees in its cozy market, just like U.S. brokers in the good old days. Falling rates should keep new customers coming. And Brazil looks less prone to the competitive havoc that beset American peers.

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Brazilian brokerage XP priced its initial public offering on Nasdaq at $27 per share on Dec. 10, above its indicated range.

The company’s market capitalization will be around $15 billion. The IPO raised over $2 billion, according to Reuters.

XP provides brokerage, investment banking services, and fund management. It had about 350 billion reais ($85 billion) in retail assets under custody as of the end of September, and reported $168 million of earnings for the first nine months of the year.

On Dec. 11, Brazil’s central bank’s rate-setting committee is expected to reduce its key interest rate by 50 percentage points to 4.5%. Local market issuance – accounting for both fixed income and equities – has increased by nearly 40% through October, according to ING.

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