NASDAQ, the world's second-largest stock market, is aggressively trying to attract Asian companies to launch initial public offerings (IPOs) or secondary listings to tap the US capital markets. Patrick Sutch, business development director (Asia-Pacific), said NASDAQ had decided to become more pro-active in this area and had created its Asia-Pacific division to pursue such business. ''The opportunities are enormous,'' he said yesterday. ''It is a management decision about whether a secondary listing or IPO is necessary, but one has to remember the US capital markets are the largest in the world.'' There are now more than 20 Asian companies with NASDAQ listings, including Hong Kong's Great Wall Electronic International, Nantai Electronics, Bonso Electronics, Electrocon International and DSG International. Mr Sutch, who spent 23 years with Hongkong Bank before joining NASDAQ in April last year, said six to 10 Hong Kong firms were hoping to list this year and he had talked to 45 companies in the territory about such a move. Mr Sutch and business development manager Xu Guangxun, who joined NASDAQ earlier this year from Ka Wah Bank's representative office in London, will make regular visits to the region to meet listings candidates, investment groups and regulatory authorities. NASDAQ intends to make considerable efforts to attract some of the 22 mainland enterprises which have received approval to be listed this year on overseas stock markets. Mr Sutch said: ''In China, we will target every company that has been given approval to list outside of China.'' To boost NASDAQ's efforts, Mr Sutch, Mr Xu and president Joseph Hardiman will visit Beijing this week to meet senior officials from the State Commission for Restructuring the Economy, the China Securities Regulatory Commission and several state-owned enterprises. Mr Sutch said the most likely scenario would be mainland enterprises taking secondary listings on NASDAQ. He said secondary listings on NASDAQ might not be necessary when Shanghai's stock market expanded, but ''until that time, I believe Chinese companies will be looking to tap US capital markets''. Unlike the New York Stock Exchange (NYSE) and the American Exchange (Amex), which both have large trading floors, NASDAQ is a computerised, screen-based trading exchange. It accounts for about 48 per cent of the US market's share volume and 14 per cent in terms of value, compared with the NYSE's 49 per cent and 61.9 per cent respectively. Last year, NASDAQ dominated the IPO market in the US with 84 per cent, or 520, of the 620 new issues. It is an attractive market because listing requirements are minimal - US$4 million in total assets, no minimum public float and a maximum $50,000 listing fee - which makes it ideal for smaller or emerging technology-based firms. ''It is relatively cheap to list and stay listed on NASDAQ and it is more liquid,'' Mr Sutch said. He was quick to challenge NASDAQ's reputation as a low-capital market, pointing out that the exchange's members included Microsoft, Apple Computer, MCI, McCaw Cellular and Intel. There are now 128 members with market capitalisation of more than $1 billion. Growing interest in foreign stocks by American investors was reflected last year, when turnover among NASDAQ's 303 foreign listings jumped 166 per cent. Mr Sutch said an initial or secondary listing on NASDAQ, the NYSE or Amex made it easy for US investors to buy equity of foreign firms rather than facing ownership restrictions in places such as South Korea and Taiwan. NASDAQ's promotional tour, which will take in Australia, illustrates the increasing competition for foreign listings by stock markets around the world. Last week, the Vancouver Stock Exchange (VSE) unveiled details of its Asian Board, which aims to attract Asian companies seeking venture capital. When asked about the VSE's plans, Mr Sutch said all stock markets were competitors. ''We are all looking to encourage foreign companies to list on our markets,'' he said. ''Where in the past we would sit at home and wait for them to come to us, because of competition we are coming to see them.'' Also, to pursue listing candidates, NASDAQ has been actively promoting its state-of-the-art computerised trading system in Asia. NASDAQ signed a memorandum of understanding with the over-the-counter Exchange of India last month and has sold software and hardware to China's over-the-counter National Electronic Trading System.
