Brazil’s stock market has potential to double, B3 chief says
Gilson Finkelsztain says Brazilian exchange has benefited from foreign inflows; in his view, IPO revival appears near
By Fernanda Guimarães — São Paulo
12/15/2025 10:00 PM Updated 4 weeks ago
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Gilson Finkelsztain — Photo: Ana Paula Paiva/Valor
Brazil’s equity market has the potential to double in size in terms of daily trading volume under a scenario of lower interest rates and a fiscal adjustment path in the country, said Gilson Finkelsztain, president of B3, in an interview with Valor. The executive notes that the Brazilian market has already been benefiting from foreign capital inflows driven by a wave of global portfolio diversification, but that local investors’ resources have yet to move back from fixed income to equities.
Foreign inflows into equities have already led the Ibovespa to post successive record highs in November, a move that has brought more optimism about a resumption of initial public offerings in Brazil. The country is experiencing an unprecedented four-year dearth in IPOs, the longest in recent decades. Without projecting a specific timeline, Finkelsztain says there is a group of around 100 companies preparing to go public and estimates that the first to reach the market will be firms with investment needs, in sectors such as sanitation, infrastructure, or pharmaceuticals. “These are sectors more conducive to an IPO agenda,” he says. He adds that falling interest rates and greater electoral clarity will support this market.
The B3 president notes that it is natural for companies, especially during the current dry spell in the local market, to look to the U.S. market for potential IPOs. B3 views the possible listing of Brazilian companies abroad with concern, although he stresses these will be isolated cases. “Competition is global, remembering that it is more expensive to go public abroad and there is a risk of lacking liquidity.”
Nearly a decade after the merger between BM&FBovespa and Cetip, Finkelsztain, who has led the exchange since then, says the rationale behind combining a variable-income-focused business with a fixed-income-focused one has proven correct. “Ten years later, B3’s thesis, in my view, has proven to be a big winner. We managed to grow both major parts of the business, both the cyclical and the non-cyclical segments.”
The company has strengthened its bets and investments in technology, data, and services, an area that has expanded at a double-digit pace in recent years, a trend the executive expects to continue. Another focus expected to gain momentum next year is retail derivatives, specifically so-called “binary options,” where investors bet on the behavior of a given asset—known in the market as “prediction markets.” For example, will the foreign exchange rate be above R$5.50 per U.S. dollar at the end of January? The choice is simply yes or no. Regulation of these products in Brazil is currently being discussed with the Securities and Exchange Commission (CVM). Below are excerpts from the interview:
Valor: How do you assess the stock market’s recent performance?
Gilson Finkelsztain: At the end of this second half we are seeing a market reaction, mainly due to an inflow of R$30 billion in foreign money, which is still very little. The potential is large if part of the R$500 billion from Brazilians returns [money that left equity and hedge funds over the past two years] and if foreigners maintain this view. The market’s interpretation of this rally is that global investors see a weakening of the dollar on the agenda and a diversification of allocations that may have reached an extreme of being overly concentrated in the United States. This diversification will attract resources to emerging markets, and Brazil is relatively well positioned to capture that. There has not yet been a major reallocation. Of those R$500 billion from Brazilians, the potential reallocation for me is still intact. It will depend on interest rates falling, reforms, fiscal adjustment, and so on—that is the 2026 and 2027 agenda.
Valor: The market saw a high number of delistings this year...
Finkelsztain: I see it as understandable that companies carried out tender offers or went private. For me, the fact that they delisted only shows how cheap Brazil was. It seems to me that all—or almost all—of those that chose this path saw an economic opportunity and said, it’s very cheap, I’ll take advantage of this moment. Obviously, there are consequences, because investors don’t like it.
Valor: And the lack of IPOs?
Finkelsztain: There has been a decline in the number of global IPOs, especially after 2022. So it was not just a Brazilian phenomenon. Now, the absence of offerings has been greater in Brazil than globally, mainly due to monetary policy conditions.
Valor: And a revival of IPOs in the local market?
Finkelsztain: Interest rates remain high and we are on the cusp of a monetary easing cycle. So the outlook seems more positive for reopening the market than it was over the past two or three years. There are 54 companies that have maintained category A registration with the CVM [which allows share issuance]. When we map it out, nearly 100 companies are still working on a potential IPO agenda. In other words, the supply data, the potential supply from companies willing to go public, remains intact. Foreign investors usually have a more optimistic bias than Brazilians, but there is still a lot of uncertainty, mainly due to the fiscal scenario. I see a chance for IPOs, especially given what we are seeing at the end of the year. I see potential for some deals, likely involving large companies in more consolidated sectors such as infrastructure, sanitation, highways, and pharmaceuticals. These are companies with major investment opportunities. The economic scenario seems more conducive to a potential IPO agenda because interest rates are falling abroad and domestically, and there is interest in diversification. But we need to see how politics aligns with this. What will candidates say? Who will the candidates be? What will be the willingness to carry out adjustment?
Valor: A group of companies is considering offerings outside Brazil. Does this worry B3?
Finkelsztain: First, competition is global. We have seen cases of companies that went public abroad where it is much more expensive to list overseas. There is a risk of companies lacking liquidity over time. Several ended up with zero liquidity, orphaned due to a lack of diversified investor segments buying their IPOs. When you go public in Brazil, you have foreign investors, HFT [high-frequency trading], local retail, and local institutional investors. It is natural for entrepreneurs to seek alternatives if they need capital. But there are liquidity and compliance costs as well; meeting U.S. regulatory costs is very expensive, costing $3 million to $5 million per year. Companies complain a lot. I see it as a natural movement, but at some point the local market will be a much more advantageous option for these entrepreneurs. I think only a minority will list abroad. But, obviously, this concerns us. We have to show our competitiveness, not just the exchange, but how the Brazilian market as a whole remains competitive.
Valor: How do you see today’s competition with B3?
Finkelsztain: I am convinced that, in local competition, these platforms [competitors] will be approved and that will be good. Competition has been approaching regulatory approval in recent years. It seems to me that at least two will come next year. Looking back at the over-the-counter market, Cetip faced competition. Ten years later, we have four or five approved competitors in OTC. And B3 retains its competitive advantage, with scale. We estimate market share above 90% even with competition and very competitive pricing. This shows that in our business, scale makes the difference. Technology and product are the secrets. We invest heavily in technology to continue investing in product development.
Valor: What is your outlook for 2026?
Finkelsztain: There is an agenda that I believe is one of innovation in retail derivatives. This is an agenda we have been working on intensively in recent years. A very interesting thesis is the expansion of mini contracts and so-called “prediction markets.” We have already submitted a request to the regulator for five new digital derivatives, also known as “zero day to expire.”
Valor: Do you think this attracts younger investors?
Finkelsztain: I am sure that today we have close to 250,000 to 300,000 clients who trade derivatives in the traditional mini-contract leverage model. I think there is a niche, I can’t say whether it will be 3 million to 5 million potential clients, who are willing to trade these digital derivatives in dollars, Ibovespa, and crypto.
Valor: And what is the potential of the Brazilian market?
Finkelsztain: This is not a forecast or guidance, but a sensitivity analysis. If we have lower interest rates and a fiscal adjustment scenario, this market more than doubles in terms of daily trading volume. And that obviously brings everything else. Then come IPOs, then more interest, then valuation. It is a virtuous circle.
Valor: What led you to step down from Santander’s board?
Finkelsztain: After I received the invitation from Santander, we conducted a full governance review at B3; it was entirely proper. We carried out all evaluations. There was no unidentified conflict. We identified potential conflicts and mitigation measures. B3’s board had no objections and authorized me to accept. When it became public, the shareholders’ meeting and some clients expressed discomfort. B3’s board reassessed the situation in light of that discomfort. And I am full-time at B3, in fact, I would not even be paid. It is very common for CEOs to sit on boards to see retail trends and so on. That was the goal. The issue is that the noise did not come from the board. It came from outside, and they [B3 board members] reassessed.
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