Jefferies Financial Group Inc. JEF is considering expanding its presence in Brazil by launching a brokerage business in the country. The company, which launched its first office in Brazil last year, is planning to increase staff amid the ongoing expansion plan.
In an interview with Bloomberg, Alejandro Guevara, senior country officer for Brazil at Jefferies, stated “Our clients asked us to open an office in Brazil, and we are very happy with the presence we built here since April last year.”
The plan includes adding another managing director to its 10-member investment banking team in Brazil, specializing in merger-and-acquisition (M&A) advisory and capital-markets services, including international equity and debt offerings for organizations of the country. JEF is further considering establishing a local debt capital markets team to facilitate the origination of dollar-denominated global bond transactions.
With 47 offices in 21 nations, Jefferies aims to expand and deepen its global footprint. Since 2019, it has more than doubled the managing directors’ count and increased the same outside and inside of the United States, respectively, by 58% as per Guevara.
Per the Bloomberg data, Brazil is witnessing a weak year for its share offerings and M&As, with higher interest rates and currency volatility being the primary headwinds. Total equity issuance in the country has dipped 13% so far this year to 24.5 billion reais ($4.3 billion). Besides, there has been no initial public equity offering from any firm of Brazil since December 2021. Amid such a dismal backdrop, Jefferies is mulling expansion in Brazil.
JEF covers roughly 44 companies from Brazil and 113 stocks of broader Latin American firms following its acquisition of independent equity research house Nau Securities last year. Moreover, the company is further collaborating with the Brazil’s arm of Sumitomo Mitsui Financial Group Inc. SMFG to offer credit and credit-associated products to its local clients as part of JEF’s global strategic alliance. In April 2023, Japan-based SMFG announced its plans to increase the company’s equity stake in Jefferies up to 15% from 4.5%. As of Nov 30, 2023, Japan-based SMFG Group owned 9.1% of Jefferies’ common stock.
The move aligns with Jefferies' growth strategy. The company announced a deepening of its global strategic alliance with SMBC in April. This initiative focuses on enhancing cooperation within the market of Canada regarding corporate and investment banking business opportunities. Also, in February, JEF led a consortium of investors to invest in Ameriprise Financial’s AMP arm, Columbia Threadneedle Investments to bolster its collateralized loan obligation platform. This move solidifies the existing relationship between JEF and AMP.
In the past year, JEF shares have surged 66.8%.
Jefferies Financial Group Inc. Price
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Currently, JEF carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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