Emerging equity markets have dropped sharply. According to MSCI they were down 14 per cent over the year to Monday night in dollar terms. With bonds and commodity prices also wobbling, will emerging equities fall further? Increased risk aversion is justified in many cases. Large current account deficits coupled with reliance on overseas funding is not a nice mix for the governments of Turkey or South Africa. But the argument that others, particularly the so-called Bric economies – Brazil, Russia, India and China – will be more impervious to global market conditions is also weakening. Year to date the major Bric equity indices are down between 13 and 18 per cent in dollar terms.

China’s market, of course, was overvalued. A shares still trade on 36 times prospective earnings. But Brazil and Russia, both on 13 times, are hardly in bubble territory. And even if market falls dissuade some companies from raising capital, the pipeline of planned initial public offerings appears huge. Bric equity issuance rose 97 per cent in 2007, to $256bn, according to Dealogic, and plans for 2008 seem even more grandiose. India’s state telecoms company, BSNL, hopes to trump Reliance Power’s recently closed $3bn initial public offering; Russia’s Rusal is weighing a $9bn global IPO, and Ping An, China’s second largest insurer, wants to raise $22bn.