Brazil Takes Emerging Market Crown

Felix Salmon passes along the news from Citigroup research that Brazil has become the world's largest emerging market as measured by the Morgan Stanley Country Index.

Brazilian free float stands at $509 billion while China's is at $482 billion. This chart shows the country weightings in the MSCI Global Emerging Markets index:

It was only two years ago that Brazil was on top, but China's stock market boom helped it overtake Brazil. Felix says that Brazil's rise "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."

It's interesting to note, however, that if measured purely by the number of listed companies, China comes out ahead with 112 compared with Brazil's 69:

So what's going on? Brazil is home to three of largest companies in the emerging markets world in Petrobras and BR Distribuidora. Meanwhile, Chinese markets have been correcting recently. But Brazil's stay on the top could be short-lived. This from the Citi report:

"We view Brazil as overbought, expensive and overdue a pause."