Emerging Market IPOs Muscle Aside Both New York and London

If there were any lingering doubts in your mind about the fading supremacy of U.S financial markets, this story should put those doubts to rest.

According to a recent article in the Financial Times, the so-called BRIC countries (Brazil, Russia, India and China accounted for nearly two-fifths of global initial public stock offerings (IPOs) last year – including some of the world’s hottest deals.

In recent years New York and London have been locked in a battle for capital market supremacy when it comes to IPOs. In 2006 the London Stock Exchange nudged out the New York Stock Exchange as global leader in IPO volume – raising more money for fledgling companies just issuing stock for the first time.

Last year, the New York Stock Exchange turned the tables, outpacing London in IPO money raised last year, but only with the help of 33 red-hot Chinese IPOs that raised $7 billion as U.S. listed ADRs in New York.

BRICs Raise More IPO Cash in 2007 than Markets in Europe or Japan

But in 2007, “each of the four BRICs raised more money through IPOs that four G7 members -- Canada, France, Italy and Japan” according to the Financial Times. In fact, BRICs accounted for 39% of all the money raised in global IPOs last year up from just 32% of the worldwide total in 2006.

And we’re not just talking about hot Chinese IPOs listing in New York or London either. Increasingly, BRIC companies are shunning the bright lights of the big city exchanges in favor of listing at home.

In fact, 25% of all BRIC IPO money in 2007 was raised within the friendly confines of their own home country – on local stock exchanges. If you include Hong Kong in this total (not technically considered a BRIC but with very strong financial ties to China), fully 38% of all new IPO money was raised by the BRICs.

Brazil Takes Top Honors in IPO Financing

The biggest IPO success story of 2007 was Brazil, where local companies raised $32 billion in 66 IPOs – all of it listed at home on the local Bovespa. This includes the successful IPO of Brazil’s Bovespa exchange itself.

To put this in perspective, $32 billion is twice as much as UK companies raised on the London Stock Exchange last year. As the Financial Times article concluded, “the financial world’s centre of gravity is shifting.”

Indeed it is – specifically the world’s financial “centre of gravity” continues to shift… toward emerging markets.