Nasdaq, NYSE listings the same: bankers

By Jonathan Spicer

NEW YORK (Reuters) – Contrast the bell that rings a new trading day in at the New York Stock Exchange with the giant video screens that stream Nasdaq prices into Times Square.

The stark differences between the two exchanges used to mean so much — but now bankers say they mean precious little to companies looking to go public, easing concerns that hang over a proposed merger of the two exchanges.

Now that the cross-town rivals are mostly electronic, and with U.S. exchanges connected in a largely shared pool of liquidity, the differences that once defined the Big Board and the Nasdaq Stock Market have faded, three capital markets bankers told the Reuters Global Mergers and Acquisitions Summit on Tuesday.

“There’s no difference if a company lists on Nasdaq or the New York Stock Exchange,” said Frank Maturo, co-head of equity capital markets for the Americas at Bank of America Merrill Lynch (BAC.N: Quote, Profile, Research).

John Chirico, co-head of capital markets origination for the Americas at Citigroup Inc (C.N: Quote, Profile, Research), said: “The trend that’s actually happening, and it’s also the reason the exchanges are doing what they’re doing, is toward this automation where you’ve got everything going to the computers.

“So it doesn’t matter,” he said.

What the world’s exchanges are doing is buying each other.

Last week, Nasdaq OMX Group (NDAQ.O: Quote, Profile, Research) made an unsolicited bid for Big Board parent NYSE Euronext (NYX.N: Quote, Profile, Research) in an attempt to better a friendly offer from Germany’s Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research), another big listings venue.

The counteroffer, which headlined a global rash of proposed tie-ups, is expected to raise thorny antitrust questions since the combined Nasdaq-NYSE would have a virtual monopoly on listing public companies in the United States.

But from a capital-raising perspective, the bankers said there was little to worry about.

“I don’t think it has a material impact on the equity capital markets business,” Mohit Assomull, global head of equity syndicate at Morgan Stanley (MS.N: Quote, Profile, Research), said of the proposed mergers, adding the IPO rebound in the last 12 to 18 months could be “pushing the exchanges to think about how they can offer a better product to issuers.”

Asked about the possibility that a combined Nasdaq-NYSE could raise listing fees, Maturo said any increase is unlikely to be “dramatic” relative to the overall underwriting and legal costs of going public.


Though most countries have one place to float shares, the United States is a rare exception.

The centuries-old NYSE, with its iconic trading floor on Wall Street, was late to embrace the electronic trading that now dominates stock markets. Nasdaq, launched in 1971 as the world’s first electronic market, in the past used its technology to attract issuers who were less interested in having a flesh-and-blood trading specialist on that floor.

Since the 1990s, the pair aggressively courted companies that were looking to go public, and they relished winning the hearts of high-profile names like Nasdaq-listed Microsoft Corp (MSFT.O: Quote, Profile, Research) or, more recently, NYSE-listed General Motors (GM.N: Quote, Profile, Research).

But maybe their sales pitches no longer matter.

“I’m not sure people are sitting there the way they used to (wondering whether) to list on the Nasdaq or the New York Stock Exchange,” said Chirico, who handles debt and equity issuance.

“At some point we will reach a situation where people won’t be so concerned if there’s one giant player, because by that time the pools of capital will make it even more global.”

NYSE bought the American Stock Exchange in 2008, leaving two listings venues. Privately run BATS plans to launch another venue later this year, which could also ease antitrust concerns over a Nasdaq-NYSE combination.

Robert Greifeld, Nasdaq’s chief executive, called any regulatory issues “manageable” when he unveiled the bid for NYSE on Friday.

Nasdaq OMX and NYSE Euronext, which run markets in both the United States and Europe, each derives roughly 20 percent of its overall revenues from listings and related services.

Bank of America is leading a group of banks that is prepared to arrange financing for Nasdaq’s offer, which is a partnership with IntercontinentalExchange Inc (ICE.N: Quote, Profile, Research). Morgan Stanley advised Deutsche Boerse on its takeover proposal.

(Reporting by Jonathan Spicer; additional reporting by Clare Baldwin and Paritosh Bansal; Editing by Gary Hill)

Nasdaq, NYSE listings the same: bankers