Exchange traded funds (ETFs) that track the markets of Brazil, Russia India and China (known as the "BRIC" block) and other emerging-market countries received some good news recently. For one, seven out of the top 10 IPOs in the third quarter were from emerging markets. Nearly half of the $57 billion raised globally by IPOs in the latest
quarter was by companies in the so-called “BRIC” countries of Brazil,
Russia, India and China, which produced a record 118 IPOs, reports Joanna Chung for the Financial Times. The Asia-Pacific region, and in particular China and Hong Kong, had
the major share in terms of both the number of IPOs completed as well
as the money raised.
One example is Petro-China, the state-owned oil and gas group, that launched an initial public offering (IPO) listing in Shanghai in a deal that could raise more than $9 billion, says Carl Delfeld for ETF XRAY. Grupo Clarin, Argentina’s largest media group raised more than $500 million on the London Stock Exchange on Friday.
The BRIC ETFs that could benefit from this include the Claymore/BNY BRIC (Brazil, Russia, India, China) ETF (EEB) and the SPDR S&P BRIC (Brazil, Russia, India, China) 40 ETF (BIK). Currently, EEB is up 62.2% year-to-date, and BIK is up 22.4% for the last three months, having launched in June.
For full disclosure, some of Tom Lydon’s clients own EEB.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.