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Executives and analysts said Monday that the closure of a China office of the NASDAQ Stock Market will not have a serious impact on Chinese enterprises aiming to make their initial public offerings on the NASDAQ.
Harry Huang, representative of the high-tech-laden stock exchange in China, said that his company would stop working to open a formal representative office in China and close the current preparatory office this month. The agency, based in Shanghai, is mainly engaged in attracting qualified Chinese companies to list there and communicate with Chinese regulators.
"Due to NASDAQ's recent change of strategy, I decided to quit from the company," said Huang.
He said the NASDAQ will concentrate on the US market. It will have only one overseas branch, in India, following the closure.
Since Huang took the post in 1999, 11 Chinese companies have been listed on the NASDAQ, including market's bright stars of Netease.com Inc and Sina Corp.
Raymond Chin, chairman of Mtone Wireless Corp, which has filed to the NASDAQ for an initial public offering (IPO), said the move of the US stock exchange will not have much impact on his company's IPO process.
"It is obviously better if they have a presence here, but typically investment banks and legal firms will guide a company on where to list and how to list," said Chin.
He added that with the development of the Internet, companies wishing to make an IPO on the NASDAQ can obtain relevant regulations and documents from its website, so the importance of an actual office is not as great as it was several years ago.
Fang Xingdong, chairman of the domestic research company Chinalabs.com Ltd and an Internet pioneer in China, also said the performance of NASDAQ-listed companies already caught the attention of many US investment bankers to the country, so companies get to know NASDAQ through investment banking agencies.
US investment bank Piper Jaffray, a medium-sized firm in the industry, which was involved with early Chinese IPOs such as Ctrip International and Linktone, held an Internet and wireless conference in March to better understand the market and attract more Chinese businesses to the NASDAQ.
Both Chin and Fang denied NASDAQ's move means that US stock markets and investors think the Chinese technology industry is unattractive.
"I would think in the long term there will be more technology companies emerging in China, so when people in the US see these companies are successful or likely to be successful, they will welcome these companies," said Chin.
The establishment of a small and medium board under the Shenzhen Stock Exchange will not pose a threat to the NASDAQ in the near term and it should not be seen as a major reason for the decision of the US stock market, said Fang.
(China Daily May 25, 2004)
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