Davis Mayer Group in Prime Position to assist Foreign Firms List on the Hong Kong Stock Exchange in 2008
Released on: February 18, 2008, 2:17 pm
Press Release Author: Shin Han Research
Press Release Summary: A growing number of large foreign companies, mostly from Europe, are saying non, nein and nee to being listed on exchanges in the United States and opt for the HKEx \"Hong Kong Stock Exchange\".
Press Release Body: SEOUL, R.O.K. Businesswire, February 18, 2008.
A surge of foreign companies are bidding adieu to United States markets and their American depositary receipts, because lackluster trading of many foreign listings, and a feeling that the costs of having a stock listed in the United States are not worthwhile.
In 2007 more than 34 foreign companies delisted from the New York Stock Exchange, and nine more had announced plans to do so, says the exchange. That tops the 21 foreign companies that joined the N.Y.S.E. Another 20 had said that they were planning to leave the Nasdaq, or have done so already.
Most foreign companies will be much better off trading on local exchanges in their own countries.
Currently the hottest IPO Exchange to list any company on is the HKEx or The Hong Kong Stock Exchange.
\"There are companies lining up to exit U.S. capital markets,\" says James Angel, professor of finance at Georgetown University.
The reasons for the foreign flight include:
.Easier to leave. The Securities and Exchange Commission in March eased the process to \"deregister,\" or terminate securities, if average daily trading volume is less than 5% of a company\'s worldwide average trading volume over the past 12 months. This rule change was the excuse many companies were waiting for, Angel says.
.Lackluster interest. Trading of many European companies\' ADRs has been light, says Susanne Kloess, a global markets expert for Accenture. Ahold, a Dutch grocery store company that owns Giant and Stop & Shop, says average daily volume of the U.S. shares has been less than 5% of its total. Most U.S. investors buy its shares on the local Euronext Amsterdam exchange.
.Improved exchanges elsewhere. Foreign exchanges have become more effective in raising capital, says Catherine Kinney, president of NYSE Euronext. Meanwhile, it\'s getting easier for U.S. investors to trade on foreign exchanges. E-Trade recently let U.S. investors trade stocks listed on foreign exchanges as easily as they can trade on the NYSE or Nasdaq.
.Increased regulatory and other costs. The NYSE listing fee for most foreign companies is $38,000 a year, Kinney says. But fees needed to comply with Sarbanes-Oxley rules and convert books to meet U.S. accounting standards can add millions of dollars in costs, Angel says.
Regulatory changes are needed, or the U.S. stands to lose its position as the world\'s money-raising capital, says Rep. Tom Feeney, R-Fla. Feeney is co-sponsoring legislation that will require the SEC to clarify the requirements of controversial Sarbanes-Oxley rules.
Expect the exodus to continue, Kloess says. \"You will see more (foreign companies) delisting from U.S. markets,\" she says. \"I\'m hearing everyone in Europe discussing it.\"
A List of select foreign companies that voluntarily delisted from the New York Stock Exchange in 2007, or said they were planning to:
Announcement of delisting
April 25 British Airways April 26 Groupe Danone May 14 Ducati July 25 BG Group July 26 BASF July 26 Metso July 27 Rhodia July 31 Fiat Aug. 2 Lafarge Aug. 21 E.On Aug. 23 Westpac Banking Aug. 29 Suez Aug. 30 Royal Ahold Sept. 4 Bayer
Source: New York Stock Exchange
Web Site: http://www.davismayer.com
Contact Details: Davis Mayer Group, Inc. Doosan Building, 10th Floor, 105-7 Nonhyun-dong, Gangnam-Ku, Seoul 135-010 South Korea