Brazilian state-owned lender Caixa Economica Federal said on Thursday that it had indefinitely postponed plans for an initial public offering of its insurance unit Caixa Seguridade, the second time this year the high-profile deal has been put off.
Caixa Economica Federal had been planning to raise more than 10 billion reais ($1.79 billion) in the offering by partially selling its stake. It would be one of Brazil’s biggest IPOs of the year.
An IPO by Caixa Seguridade was part of President Jair Bolsonaro’s government attempt to reduce the Brazilian state’s presence in the economy and raise money through asset sales.
In March, Caixa Economica Federal had called off a previous effort to float the unit’s shares amid concerns about the coronavirus pandemic impact on market conditions.
Now, one source said, besides concerns about a second wave of the pandemic, investors are becoming more selective given uncertainty surrounding the Nov. 3 U.S. presidential election.
Such concerns have hammered the tech-heavy U.S. Nasdaq and also send many emerging market currencies to multimonth lows.
(Reporting by Carolina Mandl Editing by Chizu Nomiyama and Jonathan Oatis)
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