Agricultural Bank of China Ltd and Petroleo Brasileiro SA may hit the market
with $50 billion of shares by the end of September after state-backed sales
pushed initial public offerings (IPO) in emerging markets above developed
nations for a record fifth straight quarter.
While at least 47 initial
sales worldwide were shelved since March, China's State-owned Agricultural Bank
is forging ahead with a July IPO of as much as $28 billion that would be the
world's biggest ever. Petrobras, Brazil's state-controlled oil company, plans to
raise $25 billion in September, the western hemisphere's largest sale in at
least a decade, after delaying the offering by two months on
Tuesday.
IPOs in developing countries raised $29.3 billion this quarter,
almost three times the amount in industrialized nations, as the European debt
crisis sent stock indexes from Tokyo to Paris and New York to their lowest
levels of 2010. While bears say the new sales will inundate emerging countries
and choke off capital to private companies, bulls say economic growth that's
double developed nations will underpin demand.
"They're probably pushing
the outside of the envelope," said Jeff Urbina, who helps oversee $44 billion at
Chicago-based William Blair & Co. "People are still reasonably comfortable
with the fiscal situation and growth prospects of emerging markets. I don't know
if they'll necessarily crowd out other IPOs, but they're certainly going to soak
up capital."
Greece, Spain
Stocks declined worldwide this quarter
on concern the global economic recovery will be curbed as countries from Greece
to Portugal and Spain struggle to fund their liabilities.
While the MSCI
Emerging Markets Index sank 18 percent this quarter, government-owned companies
from Poland to India pushed ahead with share sales.
IPOs from nations in
MSCI's emerging-markets gauge exceeded those by companies in industrialized
countries by $18.1 billion, extending a five-quarter streak that is the longest
since at least 1999, according to data compiled by Bloomberg. Deals in emerging
markets rose 9.4 percent from the prior quarter, while developed-market
offerings fell 54 percent to $11.2 billion.
"The investor appetite is
just not there right now" for initial sales in industrialized nations, said
Robert Froehlich, senior managing director at Connecticut-based Hartford
Financial Services Group Inc, which oversees about $396 billion. "The US is
getting painted with the European brush, and that's laying into the sweet spot
for emerging-market IPOs."
Polish insurer
PZU SA, Poland's biggest
insurer, raised 8.1 billion zloty ($2.7 billion) in April in Europe's largest
initial offering since 2007. The government and Zeist, Netherlands-based Eureko
BV sold a 30 percent stake in the Warsaw-based company at the high end of its
estimated price range.
The IPO, a record for the 19-year-old Warsaw Stock
Exchange, was part of Poland's state asset sales aimed at raising $10 billion to
help finance a widening budget deficit.
SJVN Ltd, the operator of India's
largest hydropower plant, sold 10.79 billion rupees ($240 million) of shares in
an initial offering at the top of its forecast range in May. The state-owned
company, based in Shimla, priced 415 million shares at 26 rupees
each.
State sales "will have more support from domestic institutions for
strategic reasons, like in the case of PZU", said Jeff Chowdhry, London-based
head of emerging-market equities at F&C Asset Management, which oversees
more than $148 billion.
"It will also be true for Agricultural Bank."
Scientists at Cincinnati Children's Hospital Medical Center have discovered that
a diet with high levels of fructose, sucrose, and of trans-fats not only
increases obesity, but also leads to significant fatty liver disease with scar
tissue.
The study, which was conducted with scientists from the Metabolic
Disease Institute at the University of Cincinnati, is published online Wednesday
in the journal Hepatology.
The study was conducted in mice, some of which
were fed a normal diet of rodent chow and some a 16-week diet of fructose and
sucrose-enriched drinking water and trans-fat solids. Their liver tissue was
then analyzed for fat content, scar tissue formation ( fibrosis), and the
biological mechanism of damage. This was done by measuring reactive oxygen
stress, inflammatory cell type and plasma levels of oxidative stress markers,
which are known to play important roles in the development of obesity-related
liver disease and its progression to end-stage liver disease.
The
investigators found that mice fed the normal calorie chow diet remained lean and
did not have fatty liver disease. Mice fed high calorie diets (trans-fat alone
or a combination of trans-fat and high fructose) became obese and had fatty
liver disease.
"Interestingly, it was only the group fed the combination
of trans-fat and high fructose which developed the advanced fatty liver disease
which had fibrosis," says Rohit Kohli, the study's main author. "This same group
also had increased oxidative stress in the liver, increased inflammatory cells,
and increased levels of plasma oxidative stress markers."
Kohli said
Fructose consumption accounts for approximately 10.2 percent of calories in the
average diet in the United States and has been linked to many health problems,
including obesity, cardiovascular disease and liver disease. He hopes to further
investigate the mechanism of liver injury caused by high fructose and sucrose
enriched drinking water and study a therapeutic intervention of antioxidant
supplementation.
Antioxidants are natural defenses against oxidative
stress and may reverse or protect against advanced liver damage