SAO PAULO, April 14 (Reuters) - Brazil's massive pipeline of companies seeking a market flotation is suffering a blockage of sorts as investors start to balk at some deals, spooked by the country's snowballing pandemic and political turmoil.

As a result, some companies have been forced to re-size, push back and even scrap their planned initial public offerings.

In the last two weeks, for example, medical lab Diagnostico da America SA and electronics distributor Allied Tecnologia SA both cut their respective price ranges to conclude the deals. Pharmaceutical company Blau, meanwhile, reduced the size of its planned offering and software firm LG, bank BV and Viveo, a distributor of health products, cancelled their planned IPOs altogether, at least for now. Hospital chain Mater Dei is trying to price the deal on Wednesday after reducing its price range.

Roderick Greenlees, head of investment banking at Itau BBA, said that of the 40 companies that originally planned IPOs for April and May, only about half will likely come to fruition. Still, 11 companies plan to price IPOs in the coming weeks, according to regulatory filings.

"The market has improved after hitting a low about two weeks ago," he said, adding that new deals have been launched over the last week.

Last year was Brazil's busiest in 13 years for share offerings, with 60 IPOs and follow-ons, and bankers had been prepping for an even more active 2021.

Companies in more resilient sectors such as healthcare, technology and finance tend to conclude deals, said Alessandro Zema, Morgan Stanley's head of Brazil. But even these companies have found resistance.

JOLTS TO MARKET SENTIMENT

Brazilian President Jair Bolsonaro surprised investors in February by firing the CEO of state-controlled oil company Petrobras in retaliation for a series of fuel price hikes. Later, in another blow to market sentiment, Banco do Brasil SA's CEO resigned after Bolsonaro criticized his cost-cutting plan.

Adding pressure on the political front, the Senate is preparing to install a special committee to investigate how the government has dealt with the pandemic.

A 5 billion-reais ($879.9 million) IPO by state-controlled insurance company Caixa Seguridade scheduled for April 27 will test whether Brazil's government can still lure investors.

Brazil is suffering the world's second-deadliest coronavirus outbreak and vaccinations are moving slowly , undermining confidence in the government's official GDP growth forecast of 3.2%, an estimate commonly used by investors in their calculations to set a companies valuations.

(Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/2FThSv7 in an external browser.)

Foreign investors' appetite for IPOs has diminished, a private equity manager who is planning to list a portfolio company told Reuters, and this is forcing companies to rely heavily on domestic fund managers. Many local investors are migrating from fixed income to equities as Brazil's interest rates are in the low single digits, although this move slowed this year.

In February and March, there was a net outflow of 8.5 billion reais from Brazil's B3 stock exchange, although there remains a positive balance of 17 billion reais for the year so far. Brazil's stock index, Bovespa, is nearly flat this year, underperforming U.S. indexes, where capital markets activity is booming with vaccination rollouts.

"Only a higher speed of vaccination would be able to lead to a speedier economic recovery, thus favoring the outlook for deals," said Morgan Stanley's Zema. ($1 = 5.6826 reais) (Reporting by Carolina Mandl in Sao Paulo; Editing by Christian Plumb and Matthew Lewis)