BEIJING -- The New York Stock Exchange (NYX) and the Nasdaq Stock Market (NDAQ), worried they're losing out on big IPOs from China, are trying to boost their visibility in the region. They're staffing up and touting the benefits of a U.S. listing to dealmakers at investment banks, private equity outfits and law firms in China."Obviously China is a very exciting market. We see it as the fastest-growing market outside the U.S., as well as the strongest market internationally," says Charlotte Croswell, the London-based head of Nasdaq International. This year the Nasdaq started publishing Going Public: A Guide for Chinese Companies to Listing on the U.S. Securities Markets. Written in both Chinese and English, it details minimum listing requirements, explains the role of investment banks and accountants, and even sets out a sample 20-week IPO timetable, from start to finish. There's no mystery why the American exchanges are feeling anxious. Last year, China's IPO proceeds of $24.3 billion ranked second only to those of the U.S., whose companies raised $33.1 billion, according to Ernst & Young/Thomson Financial. And in 2005 China claimed three of the world's 10 biggest public offerings. But a U.S. listing is
Companies are discouraged by America's higher regulatory burdens, litigious investors and different accounting requirements. (The U.S. uses generally accepted accounting principles, or GAAP, while some other countries employ a framework called international financial reporting standards, or IFRS.)And foreign companies that list outside the U.S. don't have any problem reaching American money managers. They can simply arrange ahead of time to sell shares to big institutional investors on the day of their IPO. As a result of all this, the American exchanges are having to work harder to attract overseas listings -- and China is a key focus. Currently the NYSE has 17 companies listed from mainland China, while the Nasdaq has 29. The NYSE "has an aggressive marketing campaign out to show the advantages of listing in New York as opposed to listing overseas," says Alan Seem, a Beijing-based partner at the law firm of Shearman & Sterling. The NYSE and Nasdaq both are seeking Beijing's go-ahead to open offices in mainland China. The NYSE now has two salespeople on the ground in mainland China, with another in Hong Kong. The Big Board is also hoping to score new listings business through NYSE Arca, an all-electronic trading platform aimed at small, fast-growing companies that don't yet meet the standards of the main board -- a category likely to include many firms from emerging markets such as China. Companies can aim to graduate to the NYSE as they grow bigger.