The stock exchange faces keen competition from the United States' Nasdaq market to attract companies to list on the proposed Growth Enterprise Market (GEM). Sources said some companies had become impatient with the market's progress, due in the fourth quarter of the year, and had decided to list on Nasdaq instead. Mainland companies Sina.com, an Internet concern, and Wondial, a telephone-set maker, have selected the Nasdaq. Company and market sources said the technology-related companies could enjoy higher price-earnings (PE) ratios if they listed in the US, and would be able to raise more capital when they went public. 'Companies can at least list with 10 to 15 times PE on Nasdaq, while in the GEM, they can barely ask for 10 times,' one merchant banker said. Rising overseas competition has seen the exchange working hard to promote the enterprise market. The second-board market is designed to help smaller, riskier firms raise funds and will have less onerous admission requirements than the main board. Senior exchange executives and the chairman of GEM, Lo Ka-shui, have been on the road promoting the market in the past few months. Stock exchange chief executive Alec Tsui yiu-wa was in San Francisco on Tuesday, aiming to attract Silicon Valley firms to list on the market. At a conference organised by the Hong Kong Economic and Trade Office and the Hong Kong Industrial Technology Centre, Mr Tsui said the market offered unique opportunities to Silicon Valley companies. He said it would follow the Nasdaq and be an alternative market with distinct characteristics offering growth enterprises a strong identity. 'US stock markets are big markets. Some companies that may be relatively small in the US context could well become major forces in the smaller but internationally well-regarded Hong Kong market,' Mr Tsui said. He said a listing on GEM would help US companies develop their ties with Asian business partners. However, instead of staying in Hong Kong, some mainland and SAR companies are moving out for the sake of a higher PE.