Robert Greifeld, the president and Chief Executive Officer of The NASDAQ Stock Market, has never been a salesman, but he played the role well in a recent meeting with representatives from Chinese companies. “The bell will ring in one minute. Let’s give it a big applause. The harder we clap, the higher the share prices will be!” At 9:29 pm on April 3rd, the opening ceremony of NASDAQ in China culminated after Greifeld’s good-natured joking.
It was an interesting occasion. Senior managers from more than a dozen Chinese companies listed on the NASDAQ stood together with Greifeld on the well-decorated platform at the Grand Hyatt Beijing. In front of the platform were other Chinese representatives whose companies were preparing for IPOs in the US.
Although he was beguiled with the performance of the NASDAQ CEO, Wayne Dai, president of VeriSilicon Holdings Co., Ltd., couldn’t set his mind at ease. Just one day earlier, Noreen M. Culhane, executive vice president of the Global Corporate Client Group for the New York Stock Exchange (NYSE), came to Shanghai to visit VeriSilicon, an application-specific integrated circuit (ASIC) design services firm, hoping to lure VeriSilicon management to make an effort to get listed on the NYSE. Culhane had also traveled to Nanjing and Beijing to lobby more than 20 other private companies for listing.
China’s booming economy has already changed the global manufacturing landscape, and begun to stir the global financial market. The skyrocketing of China’s capital markets caught many by surprise, and red-hot Chinese stocks continue their record-breaking run. On April 9th, the total capitalization of Shanghai-Shenzhen exchange markets reached RMB13,760 billion (US$1,797 billion), for the first time overtaking Hong Kong Exchange, whose primary and growth markets totaled RMB13,690 billion (US$1,788 billion). And on April 13th, the Shenzhen Component Index crossed the historic mark of 10,000 points.
In the past, people were given the impression that the NYSE was the exclusive playground for global heavyweights like China Life, China Unicom, and China National Offshore Oil. The NASDAQ, it was assumed, only attracted China’s relatively smaller private high-tech companies. There is no such difference anymore. Both the NYSE and the NASDAQ focus on private companies in China, since China’s mega-sized state-owned enterprises can satisfy their financing demands in the Shanghai or Hong Kong stock markets, which have geographical advantages.
According to a recent report from PricewaterhouseCoopers, the total amount of IPOs from China’s three regions - Mainland Hong Kong and Taiwan - had already reached US$62 billion, surpassing the combined US$48 billion of the three US stock exchanges for the first time. The trend shows that, for IPOs, the Americans are facing the threat of being marginalized.
