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SCMP Reporter

The 95-year-old New York Stock Exchange at the corner of Broad and Wall streets symbolises the driving force of US capitalism. It is also the heart of Manhattan's booming financial centre.

 So plans to transplant the exchange to another location are stirring deep emotions.

 Feelings are particularly emotional in Manhattan, where rivalries with the bordering state of New Jersey, one of the suitors for the new site, are frequent and fierce.

 The issue has become further complicated because of overtures by Battery Park City. Officials in the city at the southern end of Manhattan Island say they have the support of stock exchange chairman Richard Grasso.

 The stock exchange, which is keeping its options open, will not disclose with whom it is holding talks, much less their contents.

 The debate about where to move the stock exchange may be heated, but there is no dispute about why it must take place. The stock exchange needs more space if it is to retain its status as the most prestigious market in the US and the symbolic heart of the country's love affair with equities.

 A small army of support staff is needed to keep up with the exchange's huge trading volume, and more employees are needed for the institution to keep up with competition from regional exchanges and Nasdaq.

 The exchange also needs increasingly sophisticated technology, and new premises are needed to make equipment changes easier.

  With market capitalisation of US$13 trillion, keeping the stock exchange in Manhattan has more than symbolic significance for New York City's politicians. The securities sector accounts for 5 per cent of the city's employment and 15 per cent of its wage income. A spokesman for Mayor Rudolph Giuliani said: 'It makes New York the financial centre of the world.'  Never one to stay on the sidelines, Mr Giuliani said the first priority was to keep the stock exchange in New York and the second was to keep it in its current area, meaning Manhattan.

 The mayor said he hoped to have sealed an 'amicable agreement' on a new site within six months but he might not have accounted for the numerous land mines that seem to have been laid in the path of this plan.

 It is believed that Mr Grasso has agreed to give Mr Giuliani between four and six months to convince the owners of four buildings and a parking lot to relinquish the properties without a struggle.

 Stock exchange officials are believed to be concerned that one of the buildings - a turn-of-the-century skyscraper at 25 Broad Street recently converted into a luxury apartment building - might be difficult to clear of tenants. Even worse for these plans is the likelihood of a battle with preservationists, who have rallied to have the building protected from demolition.

  Earlier proposals for the exchange to move across Wall Street to a site at present occupied by JP Morgan hit a similar wall of protests and planning problems.

  Moreover, simply expanding the existing offices and trading floors has been ruled out as impractical.

 Also, a plan by a flamboyant developer to build a 140-storey office at the end of Wall Street to house the exchange appears to have stalled on the drawing board.

 Even Mr Grasso's preference for a new development in Battery Park City poses problems.

 There is a question as to whether a new exchange would stretch the limits of a 10 per cent cap on commercial development in the city.

 This would jeopardise the tax-exempt status of $80 million of outstanding Battery Park City Authority bonds.

 According to Lisa Kruse, a spokesperson for the New Jersey Governor's office, there have been 'indirect feelers on behalf of the exchange' about a possible move to the state.

 'When the exchange said its current facility was not big enough,' she added, 'we acted and had a meeting about moving to New Jersey. We are still meeting and there has been no decision.'  What might lure the exchange to New Jersey from the Big Apple are generous tax concessions for businesses, lower state taxes and an escape from Manhattan's soaring property prices.

 Ms Kruse said: 'Clearly, the New York Stock Exchange is world-renowned for its relationships in the financial services. To have it in New Jersey would be a real plum.'  Wall Street is not known for being sentimental, but, for many businessmen there, a site carrying the name New Jersey Stock Exchange lacks the prestige of the exchange's present name.

 'The real issue is for the member firms themselves to decide,' an investment banker said.

 New Jersey said it would happily consider some compromise if back-office and administration systems were located there.



New York goes all out to keep its exchange