Brazil broke a nearly five-year IPO drought as Compass raised R$3.2bn ($655mn) in its São Paulo debut. The offering comes amid a 15% rise in Brazil's Bovespa index this year, driven by foreign investors seeking exposure to Latin America's largest economy. The rally positions Brazil as an indirect beneficiary of Middle East turmoil, with oil prices surging due to the Iran conflict.

The Bovespa index jumped nearly 30% in dollar terms, ranking among the world's top 10 performing bourses. Foreign investors poured R$57bn into Brazilian stocks this year, more than double last year's total. Energy and mining giants like Petrobras (up 51%) and Vale (up 12%) fueled the rally, while the Brazilian real became the second-best performing currency globally, gaining over 11% against the dollar.

Bankers view the Compass IPO as a positive sign that Brazil's market is improving after years of domestic savers shifting to fixed-income products. With trading at 11 times earnings in line with historical levels, investors see room for further growth. The rally also reflects optimism about potential business-friendly policy changes ahead of October elections, though uncertainty remains about how a Middle East peace could impact Brazilian stocks.