Russell Global Index Reflects 166 Recent IPOs (Russell.com)

Russell Global Index Reflects 166 Recent IPOs
Brazil, China and India produce 40 IPOs in third quarter

Tacoma, WA — October 12, 2007 — The addition of 36 initial public offerings (IPOs) to the broad-market Russell 3000® Index for the third quarter tells only a fraction of the story on recent IPO activity worldwide. The quarterly process to add IPOs to Russell Global Indexes in a timely manner resulted in the addition of 166 stocks for the third quarter, and the United States accounted for only 22% of them.

The United States ranked first with 36 IPOs for the third quarter of 2007, Brazil ranked second with 18 IPOs and China ranked third with 16. Other countries in descending order were Italy (9), United Kingdom (8), India (8), Germany (7), Hong Kong (7), Korea (5) and Australia (4). Twenty-seven other countries produced one to two IPOs each.

Sixteen of these IPOs were large enough in terms of market capitalization to flow into the Russell Global Large Cap Index, while the remainder moved into the Russell Global Small Cap Index. The list of large caps included DLF group, a mega-cap real estate developer based in India, and VMWare, a U.S. software company.

"Recent IPO activity shows the market for new investment opportunities is spread globally," said Guillermo Cano, global policy manager for Russell Indexes. "Our quarterly process captured this latest surge in IPOs worldwide and included companies in every corner of the world, from Peru to Bulgaria, South Africa and the Philippines."

The IPOs that flowed into the Russell Global Index included 18 real estate companies, 12 computer services firms, nine banks and seven diversified financial services firms. Six of the real estate companies are based in Brazil and three each are headquartered in India and China.

"Investment opportunities that seem out of favor if you only look at the United States, such as real estate, are very much in favor when you look at the global picture," said Cano. "When a real estate IPO in India leaps into the large-cap index it tells you that investors, on a global basis, are still seeking exposure to a sector that may be out of favor domestically."

Cano added that DLF, which offered access to 10% of the company through its IPO, was 3.5 times over-subscribed. Similarly, Noble Bank in Poland, one of four Polish IPOs to flow into the global index, increased its share price 53% the day it went to market.

"This level of successful IPO activity tells us there is interest and capital out there looking for and finding investment opportunities where they're available worldwide," said Cano.

Of the full list of IPO additions for the third quarter, 98 moved into the Russell Developed Index and 68 flowed into the Russell Emerging Markets Index.

Looking at the various regions, 20 of these third-quarter IPOs were added to the Russell Latin America Index, while the Russell Developed Europe Index gained 19.

Inclusion in the various indexes is determined by market capitalization. Russell also weights members of each index by their float-adjusted market capitalization. As companies are added to Russell's indexes at the end of each quarter, Russell does not delete existing members to make room for these IPOs, but fully reconstitutes each index at the end of the second quarter of each calendar year.

Russell employs its indexes to objectively evaluate investment managers for multi-manager funds and other investment services. More than $4 trillion in assets are benchmarked to the industry-leading Russell Indexes.

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