OECD study illustrates debate about the challenges facing the capital markets

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During the roundtable held in Buenos Aires, OECD’s representatives introduced the results of the studies led by the task force of the region’s equity markets aimed to identify the major obstacles for the development of Latin American equity markets.
Among the many findings of the study, a point that calls the attention is the advantages and disadvantages perceived by the companies to go public. As an advantage, non-listed companies mentioned the access to capital as the most important reason to contemplate an IPO. Yet for listed companies, this is the 5th most important reason, behind other ones such as reputational effects, discipline of the market, professionalization and marketing. This suggests that the companies that opt to go public do not do that as a recurring capital source, but only to make the IPO.

Yet the perception of the risks of going public – or the reasons of not going public -, indicates that the major impediment is the implementation of governance structures. For listed companies, the disclosure standards are one of the main inhibiting factors. The cost of going public was also mentioned, but with a focus on the investment banking fees and not on the applicable regulatory standards.

 
The synthesis report can be accessed here:
https://drive.google.com/a/amecbrasil.org.br/file/d/1unZiSJjBK96TgTmGmUAZhs4Oy99Vg2pr/view?usp=sharing