Shares of Brazil Visa affiliate soar

Shares of Visa Inc.'s Brazilian affiliate soared nearly 12 percent Monday in what one analyst said is the world's biggest initial public offering in more than a year _ and an indication of confidence in consumer spending.

VisaNet jumped 11.8 percent to 16.77 reals a share in the stock's debut on Sao Paulo's Bovespa stock exchange. Its offering price was 15 reals.

Brazil's securities regulator said Friday that VisaNet raised $4.3 billion with the sale of 559.8 million shares in its IPO _ the world's biggest since Visa Inc.'s March 2008 IPO in the U.S. brought in $17.9 billion, said Nicholas Einhorn, a research analyst at Greenwich, Connecticut-based Renaissance Capital.

Demand for the stock indicates investors are bullish not only on VisaNet but also Brazil's economy _ which has arguably weathered the global financial crisis better than nearly any other nation, Einhorn said.

"It's definitely a solid business model and one that people like," he said. "This is definitely a play on the Brazilian consumer and by proxy the Brazilian economy."

Unlike the U.S. and Europe, there is much room for growth within Brazil's credit and debit card market, Einhorn said. Investors are clearly betting that VisaNet will continue its leading role. Redecard SA, Brazil's other major credit and debit-card processor, saw its shares fall 4.3 percent to 31 reals.

Despite the global financial downturn, consumer confidence has been rising in Brazil.

In June, it climbed 4.1 percent from the previous month, reaching its highest level since September as one-third of consumers said they expected a prompt recovery, according to the Getulio Vargas Foundation, which announced the results of its monthly survey last week.

Continued consumer spending and a resilient economy are attracting international cash.

"There are a lot of international investors looking to get exposure to Brazil's economy and market, and VisaNet is a good way to do that," Einhorn said.

VisaNet's full name is Cia. Brasileira de Meios de Pagamento.