| When global bourses fall, IPOs shine from emerging new markets |
| Last Updated(Beijing Time):2007-12-05 11:10 |
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Amid the biggest drop in global equities in five years, investors are profiting from initial public offerings from Brazil to India. Those opportunities will keep appearing in the months ahead.
Bovespa Holding SA, owner of Brazil's biggest stock exchange, has risen 43 percent since trading started on October 26, versus a 1.4-percent gain in the nation's benchmark index. India's Mundra Port & Special Economic Zone Ltd has surged 121 percent since its IPO last week; the Sensitive Index rose 1.9 percent. Athletic clothing company China Dongxiang (Group) Co advanced 26 percent since its October 9 debut, while the Hang Seng Index in Hong Kong, where the stock trades, is up 1.5 percent.
More than half the record US$255 billion raised this year through IPOs globally came from emerging markets, where economic growth is more than triple the rate of developed nations. Consumer, industrial and financial companies that went public since September 30 posted an average 11.5 percent gain compared with the MSCI World Index's 1.4-percent slump through last week, data compiled by Bloomberg News shows.
IPOs planned by XTEP (China) Co, a sneaker maker, and Bolsa Mexicana de Valores SA, owner of Mexico's bourse, may attract similar interest.
"People are uncertain about the growth outlook in developed markets, but they can certainly see plenty of growth potential in emerging markets," said Alex Tedder, who bought Bovespa during the IPO and helps manage US$7 billion in global stocks at American Century Investments in New York. "These things are in great demand."
Global declines
The end of the buyout boom and the first decline in the United States profits in five years sent the Standard & Poor's 500 Index down 10 percent for the first time since 2003 last month and erased more than US$4 trillion from equity markets globally.
The S&P 500 fell 0.6 percent to 1,472.42 on Monday, while the MSCI World lost 0.4 percent.
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