Comments on: The decline of US stocks http://blogs.reuters.com/felix-salmon/2011/05/26/the-decline-of-us-stocks/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: DanHess http://blogs.reuters.com/felix-salmon/2011/05/26/the-decline-of-us-stocks/comment-page-1/#comment-27145 Fri, 27 May 2011 03:31:49 +0000 http://blogs.reuters.com/felix-salmon/?p=8417#comment-27145 What about reverse IPOs? Hundreds of Chinese companies have ‘gone public’ in the US in this way in recent years.

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2011/05/26/the-decline-of-us-stocks/comment-page-1/#comment-27129 Thu, 26 May 2011 17:20:36 +0000 http://blogs.reuters.com/felix-salmon/?p=8417#comment-27129 The US markets will underperform their foreign counterparts because most of the listed firms still depend on the US economy for profits, and the US economy will be weak for some time.

Follow the money? Yes, it left the U.S. because we have been running massive trade deficits for decades, which are offset by ships full of cash leaving the country, or debt accumulating to foreigners. It should be no surprise that the percentage of new listings are foreign, what should be a surprise is that so many are still here in the U.S.

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By: fxtrader14 http://blogs.reuters.com/felix-salmon/2011/05/26/the-decline-of-us-stocks/comment-page-1/#comment-27127 Thu, 26 May 2011 16:27:05 +0000 http://blogs.reuters.com/felix-salmon/?p=8417#comment-27127 There was a time (and not that long ago) when equity and debt capital market access was simply no available outside the US for smaller firms and so it made sense to list in the US – even for non-US firms. The big change is that now it is possible to raise £bn in London, Frankfurt, Sao Paulo, HK, etc… So it’s really a story of rest of world capital markets striving to catch-up with the US, both in terms of market structure, regulations etc and so companies simply have more options on where to list than they ever had in the past. And so things like listing costs and say SarBox can be enough to discourage from listing in the US – and the historical benefit and kudos from listing on NYSE is less valuable than it was. (notice many non US firms have now delisted their secondary listings from NYSE too – it used to be about prestige and capital access; but if you can get capital in your home market, then the value of prestige become much more questionable)
Then there’s the fact that many IPOs are in the commodities/mining/metals sector and there, London has made itself the center of that world, so just like it make sense for Linked-in to go with its peers on Nasdaq, it does for many Commods/O&G etc… to list in London.

The last point though is v interesting – more index investing. This ought to be a good thing really, as that should mean investors would get better value for money. but yet, it seems managers have had a lot of success selling active global funds rather than trackers on say the FTSE All world. So I’d reckon the higher correlations will take a while to materialise. (though to be clear – in times of panic, all asset classes tend to correlate – but I guess we have to accept those are not “normal” market conditions and hopefully, we’ll return to “normal” conditions soon.)

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