Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Think “Globally” For Investing Opportunities

Stock-Markets / Investing 2010 Oct 20, 2010 - 08:35 AM GMT

By: Tony_Sagami

Stock-Markets

Best Financial Markets Analysis ArticleJudging from the response, my last article on Asian IPOs caught a lot of people’s attention.

Of the top 15 performing IPOs this year, nine of them are foreign companies. Out of those nine foreign companies, one is from India: MakeMyTrip.com (MMYT). One is from the Cayman Islands: Fabrinet (FN). The rest are from China, such as SouFun Holdings (SFUN), China New Borun (BORN), and Country Style Cooking (CCSC).


While a lot of investors have made bundles on the wave of successful Asian (mainly Chinese) IPOs on the New York Stock Exchange and Nasdaq, an even bigger mountain of IPO money can be made on Asian stock exchanges.

The reason is that U.S. stock exchanges are losing out on many of the world’s best IPOs.

The Committee on Capital Markets Regulation, an independent research organization dedicated to enhancing the competitiveness of U.S. stock exchanges, says U.S. exchanges are becoming second-class locations for companies to list their stocks.

  • In the first six months of 2010, a measly 2.7% of the world’s IPOs were sold in the United States. That’s right; only 2.7%, which means that 97.3% of IPOs were sold elsewhere. What’s more, that is down from the 28.7% that the U.S. averaged from 1996 to 2006.
  • Of the 20 largest IPOs sold in the world this year, a big, fat ZERO were sold in the United States. Historically, the United States averaged five of the top 20 IPOs from 1996-2006.
  • The total market value of all the stocks in the United States was 33.8%. That number was 43.3% in 1990.

U.S. Loss Is Asia’s Gain

The U.S.’s loss is someone else’s gain, and that has typically been Asian stock exchanges. The trend of companies deciding to go public in Asia is growing.

Sixty-one non-Taiwanese companies, including 43 mainland Chinese companies, have applied to sell their shares on the Taiwan Stock Exchange.

For the first time ever, a Russian company (United Rusal, HK:0486) and a French company (L’Occitane International, HK:0973) has gone public on the Hong Kong Stock Exchange. More than 80 foreign companies have applied to list their shares in Hong Kong over the coming months.

One of those 80 companies is Prada, the Italian luxury clothing chain. Prada plans to open 28 stores in China in the next year and expects its Asian sales to surpass its European sales within the next three years. China is already one of the largest luxury markets in the world, so Prada is hoping that investors will be as enamored with its stock as they are with its high-priced shoes, handbags, and clothes.

Russian oil giant Lukoil Holdings is also preparing to go public in Asia. Lukoil is trying to decide between selling its initial public offering on the Hong Kong Stock Exchange or Singapore Stock Exchange sometime in 2011. Lukoil, by the way, is the second largest oil company in Russia.

Those are just a couple of big name examples, but the river of IPOs is going to get even bigger. “Next year could be better than this year. I think the IPO market could reach about 500 billion yuan ($74.93 billion) next year.” said Jason Guo of Credit Suisse.

Investors Should Think “Globally”

My point is pretty simple: You better think ‘globally’ if you want to make some serious stock market profits.

I communicate with a lot of investors, and I am always surprised at how unwilling the majority of investors are to buy stocks on a non-U.S. stock exchange. For some reason, Americans seem to think that buying stocks in a foreign exchange is too difficult or too expensive.

IT’S NOT! Most U.S. brokerage firms have international trading desks and can process trades on most major foreign exchanges such as Toronto, London, Paris, or the four major Asian exchanges (Tokyo, Seoul, Hong Kong, and Singapore).

Get on the phone, call your brokerage firm, and ask them! The odds are VERY high that they have an international trading desk, which means that you have no excuse to limit yourself only to stocks that are listed on the NYSE, the American Stock Exchange, and the Nasdaq. Think globally!

The cost for an international trade is usually a little bit more. E-Trade, for example, charges around $23 for an international trade vs. $7.99 for a U.S. trade. That extra $16 is hardly an excuse to ignore the world’s hottest markets.

Even though it is EASY and CHEAP to invest in Asia, I know that a lot of investors won’t take off their parochial blinders. That’s a big mistake in my book, but at least keep up on the Asian companies that go public on the NYSE and Nasdaq.

Tony Sagami

Lastly, perhaps the best way to take advantage of this flood of IPOs about to hit the Hong Kong and Singapore stock markets is to invest in the stocks of the exchange itself.

Just like you can buy shares of the New York Stock Exchange by buying shares of NYSE Euronext (NYX), you can buy shares of the Hong Kong Stock Exchange and the Singapore Stock Exchange.

Both are available on their home exchange, but are also available on the U.S. over-the-counter market. The Hong Kong Exchanges & Clearing is HKXCF.PK and the Singapore Exchange Ltd is SPXCF.PK.

I’m not suggesting you rush out and buy them tomorrow. Both stocks have been on a roll, so your best option may be to wait until they go on sale.

But make no mistake. The best IPOs in the world are going someplace other than the United States, and that place is Asia.

Best wishes,

Tony

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in