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Nasdaq says Chinese listings growing
2007-08-09
China could soon become Nasdaq's biggest source of non-U.S. listings, and companies considering one appear undeterred by unease over U.S. subprime mortgage woes, the market's vice chairman said Thursday. Eleven Chinese companies have joined Nasdaq so far this year, more than in all of 2006, said Michael Oxley, an Ohio Republican who served 25 years in Congress and was known as a force behind corporate reform. He joined Nasdaq Stock Market Inc. in March. "What I've found here is very strong interest in Nasdaq across a wide range of companies," said Oxley, who was wrapping up a four-day visit to meet Chinese executives. If the trend continues, China could overtake Israel and Canada as Nasdaq's biggest source of non-U.S. listings, Oxley said. Israel has 69 companies on Nasdaq. Canada has 56 and China 40. Chinese companies that talk to Nasdaq about possible listings appear undeterred by unease in Asian markets over the impact of losses in U.S. subprime mortgages, Oxley said. "It doesn't appear to be a major factor in their decision," he said. "I don't expect it to have any long-term implications." Chinese companies often sell shares abroad not just to raise money but to gain visibility and legitimacy from being traded in New York, London or elsewhere, financial analysts say. For those on Nasdaq, "it's a combination of accessing the most liquid and visible market in the world and, I guess you could call it, the prestige of listing with a market that has such high standards," Oxley said. While in Congress, Oxley co-sponsored the Sarbanes-Oxley Act, which tightened U.S. rules on financial reporting and governance. It took effect in 2002 in response to a string of corporate scandals. Oxley said the measures haven't discouraged Chinese companies from listing on Nasdaq, though its president, Bob Greifeld, said last year that they hindered efforts to attract international listings. "I think they aspire to play in the big leagues, and they know they have to meet these requirements to do so," he said. "So instead of whining or backing off, they have made a determination that this is a competitive advantage to them in the marketplace to say they have made a decision to meet these higher standards." Nasdaq competes with the rival New York Stock Exchange for new listings, and has targeted China as a growth area. The market awaits Chinese approval to open a representative office in Beijing and already has a preparatory office in the Chinese capital, said Eric D. Landheer, head of its Asia-Pacific operations. Nasdaq says it isn't competing with China's own stock exchanges in Shanghai and the southern city of Shenzhen, and has signed a memorandum of understanding on expanding cooperation with the Shanghai exchange. Chinese authorities are reportedly pressing companies to carry out more stock offerings on domestic exchanges after a multibillion-dollar flurry of listings abroad. The country's biggest oil company, PetroChina Ltd., which is traded in Hong Kong and New York, plans a share issue in Shanghai that could raise up to $6 billion. Oxley said he had no confirmation of that policy from Chinese officials and Nasdaq has seen no impact. For U.S. exchanges trying to attract foreign listings, he said, "the future will be bright so long as the American market maintains its lead in liquidity and access to capital."
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