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Enoch Yiu

The seven Nasdaq giants made barely a peep when they began trading in Hong Kong yesterday, with just HK$18.64 million of their shares changing hands.

The seven stocks, including big name high-technology companies Microsoft Corp, Intel Corp, Cisco Systems, Dell Computer Corp and Applied Materials, began trading in Hong Kong dollars under a pilot scheme co-ordinated by the Nasdaq Stock Market and Hong Kong Exchanges and Clearing.

Bio-chemical company Amgen and coffee shop chain Starbucks Corp are also on the list.

The stock exchange attracted Nasdaq International president John Wall and senior executives from the companies to a huge debut ceremony - but getting investors to the trading floor might not be as easy.

Brokers complained of wide spreads and clumsy price movements.

Nevertheless, timing was lucky as the debut followed a 7.93 per cent rally on the Nasdaq on Tuesday and came amid a technology-led 5.16 per cent rally on the Hang Seng Index.

The seven shares ended 2 to 4 per cent higher than their US closes on Tuesday.

Cisco was up as much as 17 per cent to HK$547 before dropping back to close at $482 (about US$61.855), a 3.2 per cent gain from the New York's close of US$59.875 on Tuesday.

Applied Materials saw the heaviest trade, with 9,530 shares worth HK$6.72 million crossing the board.

Amgen saw the least trade, with a turnover of just 840 shares worth HK$436,880.

Brokers said Nasdaq stocks were not familiar enough to local retail investors for any major trades, but a lot of investors dipped in to buy the minimum 10 to 20 shares.

'On the first day, we have already seen a lot of retail investors trade a small amount of the Nasdaq stocks,' said Dannis Lee Jor-hung, chairman of DL Brokerage. 'They will increase their trading as time goes on.' The Nasdaq's sharp rise on Tuesday turned off investors, who expected profit-taking in the next session.

Another broker complained that spreads were too wide. Most of the stocks traded at spreads ranging from HK$5 to $17.

'I think the exchange should appoint more market makers to quote the price in a bid to narrow down the spread,' he said.

The exchange has appointed three market makers.

'A market would not be built in just one night,' Mr Wall said.

'We will review the performance of the Nasdaq stocks trading in Hong Kong three to six months down the track,' he said, pointing out the opportunity to trade the stocks in Hong Kong dollars could be a lure for local investors.

They could also use their local broker rather than open an account at one of the US houses.

More Nasdaq companies would be traded if the first batch did well. The second round would involve smaller stocks, Mr Wall said.

Nasdaq and the stock exchange were working with US and Hong Kong regulators to increase Nasdaq listings of Hong Kong companies. The timetable had not been fixed, Mr Wall said.

Microsoft Hong Kong general manager Graham Brant said trading was also thin because most of its investors traded in the US and too few shares were available in the local market, but this would change with time.

Graphic: nasda1gbz 



Nasdaq 7 start slowly