from Summit Notebook:
Nasdaq president to finance companies: come hither
A fertile planting ground for tech, biotech and even some energy offerings, Nasdaq OMX has historically struggled to lure listings in some other areas, notably financial services.
Now, that could be about to change, Nasdaq OMX President Magnus Bocker said at the Reuters Exchanges and Trading Summit. As Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, it sees financial services firms as one of the most promising areas.
That Nasdaq would at least be hoping to narrow the gap in financial services listings with NYSE, the traditional ruler of the space, is not as out of left field as it might sound.
The exchange has already made some inroads and can point to some recent conquests like CME Group, which moved from a dual listing on Nasdaq and NYSE to a sole Nasdaq listing. Northern Trust, the fund administrator which has weathered the financial crisis with relative ease compared with some larger rivals, is another bright point.
And looking forward, such longtime NYSE stalwarts as Morgan Stanley and Citigroup have both recently been reportedly eyeing spinoffs of high risk units -- like Morgan Stanley's trading desk and Citigroup's Phibro energy unit. And there's even talk that Bank of America could eventually spin off Merrill Lynch.
Nasdaq powers Iraqi stock exchange’s electronic trading
Talk about trying to get a piece of an emerging market.
Nasdaq OMX said on Tuesday that its trading and clearing system was used in the launch last week of electronic trading on the Iraq Stock Exchange, or ISX, as it is known.
It is not the first time U.S. exchanges have partnered with counterparts in the Middle East. Nasdaq operates Nasdaq Dubai, and last year, the New York Stock Exchange bought a 25 percent stake in Doha Securities Market. But it may well be the first time an exchange struck a deal in a war torn country, another sign that Iraq may slowly be returning to a semblance of normalcy.
With 3,800 listed stocks, Nasdaq is well positioned to help out ISX, an embryonic exchange started in 2004 that lists only 91 stocks. About half of those are finance-related companies, such as Bank of Baghdad and Babylon Bank, while others include hotels and agricultural companies. Please click here to see the list.
Only five stocks are available for electronic trading for now, but a start is a start, and other stocks will follow in the coming months, ISX and Nasdaq said.
U.S. still a draw for foreign IPOs
Stock exchanges in emerging markets have grown more sophisticated in recent years, giving Nasdaq and the New York Stock Exchange a run for their money in attracting new overseas IPO listings.
Yet last week, Chinese video games maker Changyou.com, made a spectacular debut on the Nasdaq, and on Monday, Israeli tech company N-trig, which makes pen and touch devices for notebook computers, said it was planning a Nasdaq listing in 2010.
But why would Changyou.com, for example, with virtually no sales to speak of in the U.S., list there, rather than on a Chinese exchange?
Changyou chairman Charles Zhang told Reuters last week: “The U.S. is still the most sophisticated market, especially for technology investors.” And the new rules recently announced to make China’s exchange attractive will take a few years to really draw IPOs, he said. What’s more, the liquidity in the U.S. stock markets is deeper than anywhere else.
And companies, foreign and domestic, want to list on the exchanges where their peers are listed. Changyou’s parent, Sohu.com, has been on Nasdaq since 2000, and competitors Giant Interactive Group, Shanda Interactive Group and NetEase.com are all U.S.-listed, so it would have made little sense to list elsewhere.
Fears about Sarbanes-Oxley, the corporate governance law many called onerous and said would drive IPOs away from U.S. exchanges, have also subsided, NYSE’s head of listings Scott Cutler said recently. In this scandal-ridden environment, maybe more oversight is turning out to be another selling point.
NYSE vs Nasdaq new listings battle in 08: call it a draw
The IPO gods doled out more misery than joy in 2008 to both two major U.S. stock exchanges, the New York Stock Exchange and the Nasdaq, with only 29 new companies to fight over in their ongoing battle for listings. That compared with 202 listings in 2007.
NYSE won 13 of those IPOs, including the largest IPO ever, the $17.9 billion issue by credit-card issuer Visa in March, and a $1.4 billion IPO by American Water Works. That fueled its share of IPO proceeds for the year to $24.7 billion, or 94 percent of the total for the year, according to Thomson Reuters data.
Nasdaq’s largest deal, the $500 million IPO by solar equipment company GT Solar, tanked on arrival, finishing the year 83 percent down off its offer price.
Still, Nasdaq won the only IPO in the fourth quarter of 2008, by online university operator Grand Canyon Education Inc, which was also the best performing IPO of the year, ending the year 57 percent over its offer price of $12. CardioNet, another Nasdaq IPO, was up 37 percent.
Absent bountiful IPOs, the battle was on to woo companies away from each other in 2008, with each exchange luring 8 companies from the other. NYSE managed to attract big names such as Speedo maker Warnaco Group and job-search web site operator Monster Worldwide.
It’s a positive development that Nasdaq looks for ways to attract new listings and end a virtual drought in IPOs, but looking for only financial services firms is not a right approach. There are many other promising areas as well.