Brazil Now the Largest Emerging Market

From Annelena Lobb:

Brazil edged past China to become the largest emerging market in the world, as measured by Morgan Stanley Capital International's emerging markets index. Brazil has a free-float market capitalization of $509.10 billion and comprises 14.95% of the index; China, $481.80 billion and 14.15%, respectively, according to MSCI, FactSet and Citi Investment Research.

I suspect this is a function of the fact that many Chinese companies have only sold off a relatively small portion of their capital in the public markets, while big Brazilian companies like Vale and Petrobras have had multiple rounds of equity offerings. But even so, it's impressive, given that the Chinese stock market is in a bubble phase while the Bovespa isn't.

See also: Brazil Takes Emerging Market Crown

Comments

[Ruihanshi:]

The reason that Brazil is bigger is largely due to the fact that large Chinese companies list on exchanges around the world and that foreign investors have largely been kept out of the domestic Chinese stock market until very recently. The passage of the QFII rules has brought more foreign money into the market, but given that most of the best companies already list in places like the US and Hong Kong most foreign investors see no reason to buy shares in the Shanghai exchange.

China Stocks Data Points • More than fifty PRC companies are currently listed on foreign stock exchanges • The aggregated market capitalization of just the top 10 PRC companies listed on U.S. stock exchanges is more than $361 billion.

2008 Feb 29 01:29 AM

[huangthomas:]

Free float? To whom? Non-Chinese citizen still have very limited access to A-shares market, except for very limited QFII. I still don't believe there is an intelligent way of sorting this thing out. Most of our investment in China is still confined to H-share or red chip shares in Hong Kong or N-(New York)shares in the US. Most American don't invest in A-share market, where is that bubbly P/E of 50-75 came from? Most H- and N- shares have P/E of 15-20. Please be honest!

2008 Feb 29 09:57 PM