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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

THE NEW YORK GOLD RUSH

Why Asian firms are listing on the NYSE


more stories
Big Bang Orix is moving fast to take advantage of Japan's increasingly open markets

Q & A Orix CEO Miyauchi on taking risks

NYSE Listing in New York - the latest corporate fad

IT WAS LIKE A global coming-out party when Orix Corp. went public on the New York Stock Exchange last year. Only the second Japanese financial firm to list - the first was the Bank of Tokyo-Mitsubishi 10 years ago - Orix was in the vanguard of Asian companies to register on the NYSE post-Crisis.

Various Asian firms were set to take their chances in New York two years ago, but the recession scuttled their plans to list. Now, with Asian markets recovering, several of these firms have revived their plans. Korea Telecom joined the exchange last month. And South Korean steel giant Posco plans to list in New York next month. About time, some say. Measured against global economic clout, the region is under-represented on the NYSE - 59 Asian companies are listed, compared with 95 from Latin America.

The benefits are various: harness the exchange's vast fund-raising potential, gain international prestige; put stock in play 24 hours a day. A NYSElisting also has specific benefits for Asian companies with American operations. It allows them to offer stock options to local employees, a boon in a drum-tight labor market. And being on the Big Board makes it easier to conduct mergers and acquisitions in the U.S.; many American firms will not accept foreign stock.

In the past, Asian outfits didn't see the benefits of a New York listing because there was plenty of cheap capital at home. Besides, joining the NYSE meant greater corporate transparency than was required in much of Asia. But James Shapiro, the exchange's Tokyo-based regional representative, says that in discussions with Asian executives, he has observed "a shift in the way people talk about where their companies are going. In the past they were doing so well they didn't think about playing by the rules. Now they realize they have to and are willing to change."

By listing in New York, Shapiro reckons, Asian companies are demonstrating a new willingness to open their operations to outside scrutiny. "The Crisis," he says, "has forced companies to adopt a stark re-evaluation of their practices. If they don't change by improving their corporate governance, they will be left behind." That said, because of legal and other complexities, the NYSE cannot hold an Asian company to the same level of accountability as expected in the U.S.

That hasn't stopped U.S. investors from gobbling up respectable NYSE-listed Asian corporations. Still, share prices plunged in 1997-98 as the region's markets soured - the NYSE is a market, after all. But more recently, improving conditions in Asia have boosted prices in New York trading. The value of Asian holdings by Americans has more than doubled since 1996 to $43.1 billion.

"Ihope it won't take long for Asia to increase its presence on the NYSE," says Shapiro. He reckons interest will surge in the coming two or three years, but that it will be a long time before the region's representation is commensurate with its economic importance.

- Reported by Murakami Mutsuko/Tokyo and Claire MacDonald/Hong Kong


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