Bolsonaro’s recent confrontation with Brazil’s Supreme Federal Court (STF) amid an economic crisis has increased fears about the country’s reform process and threatens to poison the environment for 25 pending IPOs, which – added to 44 IPOs this year so far – would break a record in Brazil.

Last week, Bolsonaro lowered the tone of his fight with the country’s highest court, which authorized an investigation of him and his allies based on accusations that they had attacked Brazil’s democratic institution. But in the market they are still wondering. how long the truce will last The benchmark Bovespa index has lost 2.9% this year in US dollar terms, making it one of five global indices in negative territory for the year.

“The outlook for IPOs is more difficult. A possible institutional crisis may reduce the chances of approval of the reforms necessary to boost economic growth, ”said Gustavo Miranda, head of investment banking at Banco Santander Brasil.

Even before the pro-Bolsonaro demonstrations on September 7, IPOs were facing a difficult time amid slow growth, high unemployment and a severe drought that puts pressure on food and energy prices.

Cement maker Intercement Brasil decided to cancel its share offering in July as investors offered lower valuations, while aluminum producer Companhia Brasileira de Aluminio, among others, had to cut its offer prices to sell its shares.

“We have been advising companies that are planning an IPO to be prepared in case market conditions recover in the coming weeks,” said Roderick Greenlees, head of investment banking at Itaú BBA, ruling out a total closure of the markets for share offerings.

So far this month, the only two companies that are challenging the market to try to conclude their IPOs are the gym chain BlueFit and the pharmaceutical company Althaia, both scheduled for next week.