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Rohit Singh
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Wed, 07 Feb 2007
Hmm...
Interesting article in NYT about the New York financial market's
perceived decline in stature. It's behind the Times Select wall. However, if you've access to Factiva (many university libraries do), you should be able to read the article via Factiva:
"More important, the main reason companies are listing in their home
markets is that globalization is not a lofty theory but has truly
produced more competitive global markets. That means more companies will
choose not to trek halfway around the world to raise money -- especially
when fees in London are half that of the United States.
But if you are Mr. Schumer or Mr. Bloomberg, there are reasons to be
alarmed.
As I.P.O.'s move, so does trading: where the company lists will dictate
where there will be more liquidity, more hedging and more
over-the-counter derivatives in the market where the underlying stock
exists.
This is a boon for banks like Goldman Sachs and UBS, who will profit on
underwriting companies from China to Mars. But the banker doing that
deal will hail from China and his bonus will help inflate Chinese real
estate, art and restaurant prices, not New York's. And as more companies
list there, more institutions will seek to do business there -- hedge
funds, for example -- generating more business for the Shanghai office
and fewer taxes for New York.
....
New York will also have to accept that it will be a leader among global financial centers rather than the leader. And while it is natural that New York politicians strive to keep taxes and jobs at home, not even the newly enlightened Mr. Spitzer can buck globalization."