Caution everywhere. The recovery may not last. In the UK, whispers that state-controlled Royal Bank of Scotland might issue shares creates headlines. Elsewhere, investors fear stock markets have peaked. But not, it seems, in Brazil, where Spain’s Santander is making ready a $7bn initial public offering for its local unit. The issue would make Brazil the second-biggest IPO market this year, according to Dealogic, second only to China.

Brazil is an easy story to buy – or sell. Its investment-grade economy suffered the slimmest of recessions this year and may grow 4 per cent next year. It also has a burgeoning middle class for whom credit is still a novelty. At about 41 per cent of gross domestic product, credit penetration is half the global average. Santander’s local bank, Brazil’s fourth-biggest by assets, meanwhile enjoys spreads as high as 16 per cent on its loans, and contributed a fifth of the group’s profits last year. All this may explain the slightly heady valuation of the 16 per cent stake being floated. At the IPO’s mid-point, Santander Brazil will price at 15 times this year’s earnings, up there with Chinese banks and at a 15 per cent premium to its Brazilian peers’ average.