Posted: Thu Sep 27, 2007 8:59 am Post subject: Talbot Reese in Prime Position to assist Foreign Firms List
Talbot Reese in Prime Position to assist Foreign Firms List On the Hong Kong Stock Exchange.
Released on: September 26, 2007, 8:13 pm
Press Release Author: Talbot Reese, Inc.
Press Release Summary: Big 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: A surge of foreign companies are bidding adieu to United States markets and their American depositary receipts, because lackluster trading in many foreign listings and a feeling that the costs of having a stock listed in the United States are not worthwhile have dampened enthusiasm.
Already this year, 34 foreign companies have delisted from the New York Stock Exchange, and nine more have announced they plan to do so, says the exchange. That tops the 21 foreign companies that have joined the N.Y.S.E. Another 20 have said this year they plan 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."
Select foreign companies that voluntarily delisted from the New York Stock Exchange in 2007, or said they plan 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
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