Business
UPDATED: 18:53, June 10, 2006
NASDAQ looking to broaden China coverage http://english.peopledaily.com.cn/200606/10/eng20060610_272892.html
NINGBO: The world's leading bourse, the NASDAQ, will intensify its efforts to broaden its appeal beyond tech companies in China, said Lawrence X. Pan, its chief representative in China and its Asia-Pacific managing director.
"We hope people here regard the NASDAQ as a stock exchange for companies from all industries, not just for high-tech firms," he said.
Since Pan took up his position last March, he has been doing everything possible to change the bourse's stigma of a "tech-laden" exchange in China. It is natural that people have such a mindset because a look at the NASDAQ-listed Chinese firms creates the impression that the bourse is tech-heavy.
Almost all of the Chinese companies listed in the NASDAQ are dotcom firms, such as Shanda, Netease, Sina, Sohu, Ctrip and Tom Online.
But globally, Pan said the NASDAQ is a diverse bourse, with 28 per cent of the listed firms from the information technology industry, 22 per cent from the financial sector, 19 per cent from the health-care sector, 15 per cent from the consumer goods production and retailing industries, and 11 per cent from the manufacturing sector.
In the past year, efforts to this end have achieved results, according to Pan.
The latest listing, China BAK Battery Inc, a leading provider of lithium-ion battery cells, went on the NASDAQ market 10 days ago. It is the first Chinese company from the manufacturing category to be listed, said Pan.
Before it, Focus Media Holding Co Ltd became China's first domestic media company listed on the NASDAQ market, and the medical device maker China Medical Technologies made China's debut in the health-care sector last year.
"Now in the pipeline, there are companies from sectors such as consumer-goods, education, airline and transportation," Pan said. To broaden its coverage in China, the bourse is actively carrying out co-operation on a regional and industrial level.
"We will co-operate with China's ministries and various industry associations," said Pan, adding he had talked with the Ministry of Education, the Ministry of Science and Technology and associations from the textile and non-ferrous metal industries.
In May, NASDAQ signed an agreement with two provinces in the Yangtze River Delta to encourage Chinese companies to list on its exchange.
Pan said the agreement was signed with the Zhejiang Province Financial Affairs Office, based in Hangzhou, and the Jiangsu Provincial Economic and Trade Commission, based in Nanjing.
Both provinces have agreed that the NASDAQ will be the preferred stock exchange for Zhejiang and Jiangsu companies when listing in the United States, said Pan, who visited Ningbo city as a delegate for the China Daily CEO Roundtable International Summit on Yangtze River Delta Development. The bourse executives will try to convince China's senior company executives and government officials at various high-level forums and conferences to come on board by showing them real cases, Pan said.
"We want to have more pre-education before companies think about going public."
Besides the New York-based NASDAQ, the New York Stock Exchange and the London Stock Exchange are all in hot pursuit of fresh listings of fast-growing Chinese companies.
But NASDAQ has outpaced its rivals for now. The world's biggest electronic exchange has listed 28 China-based companies so far, with a total market capitalization of US$20 billion. Market capitalizations range from US$2.4 billion for the largest, online game operator NetEase, to US$89 million for the smallest, Qiaoxing Universal Telephone.
However, the NYSE boasts market capitalization of US$335 billion for the 16 Chinese companies listed on the Big Board. That's because the NYSE mostly lists giant, state-controlled enterprises, such as China Telecom and PetroChina.
However, Pan said trading is more active with about 10 million shares changing hands everyday, compared to 2.5-3 million shares on the NYSE. Commenting on competition, Pan said it will help the capital market in China become bigger, and in return, bring benefits to the bourse.
He added that the NASDAQ would not suffer any impacts brought about by China's initial public offerings resumption. China has lifted its year-long ban on IPOs after adopting new regulations last month. "A healthy Chinese stock market is in our interest," he said.
Source: China Daily
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