The New York Stock Exchange (NYSE) plans to open an office in Beijing, its chief executive was quoted as saying yesterday, as he prepared to head to China to get more companies to list on the US bourse.
John Thain, who was set for talks with Chinese companies that might be ready for an overseas listing, told the state-run People's Daily the NYSE had applied for permission from the Chinese authorities to set up the office.
"It will help deepen and speed up development of cooperation between the NYSE and China," Thain told the newspaper.
"A large number of Chinese companies have become globalized, cross-border corporations and Chinese companies need more capital," he said.
Thain has nurtured close contacts with China since becoming head of the NYSE, with this week's trip being his third in his current position.
In August, the NYSE signed a memorandum of understanding with the government of China's Jiangsu Province, one of the the nation's most developed and economically active regions.
Under the agreement, Jiangsu said it would promote the NYSE as the "US stock exchange of choice" for local companies intending to list in the US.
"More and more private Chinese companies are listing in New York and that's a good thing," the People's Daily quoted Thain as saying.
"But in future, the NYSE will also strive for listings by even more large state-owned enterprises since they are the backbone of China."
There are currently 18 Chinese companies listed on the NYSE, including big names such as China Southern Airlines (
In addition eight companies from Hong Kong and another five from Taiwan are listed on the NYSE.
As of Aug. 31, the 31 companies from the Greater China area had a total market capitalization of US$671 billion, according to data from the NYSE.
As Chinese companies seek to tap global financial markets for funds, competition for their business among bourses across the world is heating up.
"Of course, the NYSE is under a lot of pressure, everyone knows China is a huge market," said Zhang Qi, a Shanghai-based analyst with Haitong Securities (
The high-tech Nasdaq market, for one, is emerging as more of a potential rival for the NYSE, even though so far it has addressed a relatively niche market, mainly attracting Chinese dotcoms such as Netease (
Earlier this year, Nasdaq's chief China representative was quoted as saying it hoped to rid itself of its "stigma" as a "tech-laden" exchange, broadening its appeal to a larger number of Chinese companies.
A number of Chinese companies have also been attracted to European exchanges, frequently arguing that less cumbersome listing procedures make them a better choice than the US with its more over regulatory environment.
The best known example is flag carrier Air China, which picked London and Hong Kong for its 2004 overseas listing, citing the similar regulatory environments in the two cities.