NYSE, Nasdaq, other western bourses plan to open offices in China

26 May 2007

Mumbai: Overseas stock exchanges, including NYSE Euronext and the 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.

The list also includes London Stock Exchange Plc and Deutsche Borse AG. The Tokyo Stock Exchange, meanwhile, said it plans to establish its first office in Beijing to encourage Chinese companies to list in Japan.

China''s new regulations take effect on July 1, allowing overseas bourses to set up representative 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.

Foreign bourses are looking to win a share of lucrative stock sales by Chinese companies. Analysts expect domestic initial public offers to be around $25 billion to $30 billion in 2007, more than the $20 billion to $25 billion expected for Hong Kong.

Overseas stock exchanges may not mean much to most Chinese firms, 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, the exchange''s Asia-Pacific executive director, at the conference.

China''s benchmark CSI 300 index surged more than 90 per cent this year as Chinese firms like Ping An (Insurance) Group Co. raised $5 billion domestically, the world''s biggest stock sale by an insurer.