Brazilian corporate governance body gets active

I attended the conference in São Paulo of Brazil's CODIM, another spaghetti acronym, this time for Market Information Disclosure Guidance Committee (Comitê de Orientação para Divlugação de Informações ao Mercado), aimed at IR pros.

CODIM is celebrating five years and getting to grips with issues that dog the industry worldwide from the use and abuse of quiet periods, dealings between IR and the media, when to use blackouts, the use of guidance and how to deal with rumours.

Highlights included the spirited attack by Marcelo Mesquita, a manager at Leblon equities, on the use of quiet periods during share offers. He pointed out that restrictions are antiquated in the Information Era and noted that roadshows continue to benefit only the largest investors. More needs to be done to publish roadshows and investor meetings online, panelists agreed.

Geraldo Soares, a coordinator of CODIM, discussed just how few Brazilian companies are up to par in their IR efforts. He estimated that of the roughly 400 listed companies, 150-200 comply with the bare bones legislation, but offer little or nothing more. That lack of commitment compromises all Brazilian listed companies and justifies the need for efforts to improve disclosure and add more codes, he notes.

The controversy over the distortions in the publication of relevant facts continues. In Brazil, these must be widely disseminated in the media at costs that are exorbitant with R$50,000 cited as typical. That is driving companies to seek ways to get round the law and make greater use of press releases.

Lastly, Lucy Souza, the president of APIMEC, the association of certified investment analysts, discussed how the market regulator had delegated responsibility for monitoring sell-side analysts' reports to the body. APIMEC is looking into whether they should be able to attend roadshows and will pronounce on this soon. APIMEC also plans to keep a tight watch on conflicts of interest and privileged information, she said.

Brazil's rapidly emerging governance world is an area that I cover frequently. Most recently, I touched on it when I wrote about the emergence of the group that aims to promote São Paulo as a hub . I will be revisiting the issue in December.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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