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NYSE, NASDAQ plan offices in China

Overseas stock exchanges including NYSE Euronext and NASDAQ Stock Market Inc said they plan to open offices in China for the first time, amid efforts to woo Chinese companies to their bourses.

NYSE Euronext, NASDAQ, London Stock Exchange Plc and Deutsche Borse AG are all preparing to set up representative offices in China when regulations that take effect on July 1 allow them to do so, the bourses' executives said at a private equity conference in Beijing yesterday.

"Setting up shop locally will allow us to conduct many more promotional activities on the ground, and to be in closer touch with Chinese companies," Rainer Reiss, a Frankfurt-based managing director at Deutsche Bourse, said in an interview yesterday.

Foreign bourses are looking to win a share of lucrative stock sales by Chinese companies. Domestic initial public offerings will probably amount to US$25 billion to US$30 billion this year, more than the US$20 billion to US$25 billion expected for Hong Kong, said Jing Ulrich, JPMorgan's Hong Kong-based chairman of China equities.

China's benchmark CSI 300 Index has surged more than 90 percent this year as Chinese firms like Ping An (Insurance) Group Co (平安保險) raised US$5 billion domestically, the world's biggest stock sale by an insurer.

Overseas stock exchanges "aren't the holy grail for 100 percent of Chinese firms," Reiss said. "But an overseas listing is helpful for companies looking for strategic acquisitions and brand recognition abroad."

Selling shares on NYSE Euronext would allow Chinese companies to make acquisitions overseas with their New York-listed stock, said Yang Ge (楊戈), the exchange's Asia-Pacific executive director, at yesterday's conference.

China's securities regulator issued rules on May 21 allowing foreign bourses to set up offices in the country. They aren't allowed to participate in "operational activities," though they may provide liaison, promotional and research services, the China Securities Regulatory Commission said.

The Tokyo Stock Exchange said on May 22 it planned to establish its first office in Beijing to encourage Chinese firms to list in Japan.

Plans by international exchanges to set up offices in China were also confirmed by Jane Zhu (祝曉健), Asia-Pacific head of the London Stock Exchange, and Xu Guangxun (徐光勳), NASDAQ's China chief representative, at yesterday's conference.

NASDAQ, the world's largest all-electronic exchange, said in April it will introduce an index tracking Chinese companies traded in the US as part of an effort to lure more international listings.
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