New York Stock Exchange chief sees Asia as big source of listings
NEW YORK » NYSE Group Inc. Chief Executive John Thain travels to China next week on a mission to lure more listings to the world's largest stock market. The trip also has another purpose, almost like house hunting in a new neighborhood.
Thain, who has been at the helm of the New York Stock Exchange for three years, has his eyes set on Asia as the next step in his plan to build a global financial marketplace. The NYSE's $13 billion combination with the Paris-based Euronext exchange is expected to be approved soon by European regulators, setting up a shareholder vote there on Dec. 19.
The NYSE now trades shares of only 31 companies from China, Hong Kong and Taiwan. But Chinese companies have been among the NYSE's hottest initial public offerings this year, and persuading more to list could make it easier for individual investors in the United States to gain access to their shares.
Investment advisors have long talked about the benefits of overseas diversification among investor holdings. Consider that Hong Kong's Hang Seng composite has soared 35 percent this year, topping the Dow Jones industrials' 15 percent gain and the Standard & Poor's 500 index's 12 percent rise.
That helps explain why Thain's ambitions go far beyond boosting listings on the Big Board. "Over the next three to five years, we will become global and more diversified. The next logical spot is Asia," Thain said in an interview with the Associated Press. "At some point we want a position in the Chinese market and in the Indian market."
He isn't alone. Rival Nasdaq Stock Market Inc. this week announced its making another bid for the London Stock Exchange, and CEO Robert Greifeld also believes Asia remains a necessity to go global.
The Nasdaq has been a thorn in Thain's side this year, taking increasing market share in executing trades for NYSE stocks. This comes at a time when both exchanges are looking to broaden their revenue stream from listing foreign companies. But an increasing number of them are choosing to list their shares in London, Hong Kong and elsewhere because of perceived tougher U.S. regulatory environment.
Treasury Secretary Henry Paulson is trying to address those concerns. He said on Wednesday that U.S. regulators must ease rules requiring public companies to test internal controls under the Sarbanes-Oxley reform law, a move that would help the NYSE keep and attract business.
Thain will give a speech at the China Europe International Business School in Shanghai on Tuesday, focusing on growth in the Chinese capital markets and NYSE's leadership in driving globalization.
He'll also spend time meeting with some of China's biggest companies in Beijing, trying to persuade them to join the NYSE. There are currently 18 companies from the Peoples Republic of China listed on the exchange, with a combined market value of $458 billion.