NYSE Continues to Be The Strongest Global Exchange

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Scott Cutler is Executive Vice President and Head of Global Listings at NYSE Euronext (NYSE: NYX), where he is responsible for managing the exchange’s relationship with over 2,100 companies listed at the NYSE from the United States, Canada, Latin America, and Asia, as well as over 2,000 companies listed at Euronext in the European domestic markets.  By attracting new listings and overseeing IPOs he has contributed to the NYX’s recent successes.  For the second consecutive year, NYSE Euronext raised more proceeds from initial public offerings than any other global exchange group.  In 2012, 117 IPOs raised USD 36 billion in total global proceeds.

Nick Slepko:  What trends do you see developing this decade and how is the NYSE Euronext positioned to make the most of them?

Scott Cutler:  Globalization will continue, and I think NYSE Euronext is uniquely positioned among global exchanges to be able to capture opportunities emerging from that trend.  For example, in theU.S. in 2012 we had eleven IPOs from international markets (Latin America, Asia, and Europe) list on the NYSE.  Globally, we were the number one exchange for capital raising with USD 36 billion in IPO proceeds.

The other trend is that the IPO market will continue to be the place where investors find opportunities to invest in innovation, technology, and markets, as well as the growth sectors of any economy.  For example, in 2012 29% of the transactions that came to the market in the US were from technology, another 12% from consumer – I expect those levels to continue. 

Slepko:  What about ADRs and depositary receipts in general [foreign stocks that trade on local exchanges]?  What do they mean to the NYSE? 

Cutler:  We have about 450 issuers from outside the US from 60 countries, and most trade via the ADR structure.  The international market for us has always been a significant part of our platform.  ADRs coming out of Latin America are going to continue being an active area for us for the foreseeable future.

Latin America is unique as many of the companies are dual-listed in their local market as well as the US.  There’s a significant amount of north-south liquidity in the markets, same trading zone.  It makes for a symbiotic relationship which means many of the companies have the opportunity to access the deep pool of liquidity and institutional investors in the US while at the same time satisfying the regional demand of pension funds and institutional investors in their home countries.

Slepko:  How did you get Teva (NYSE: TEVA), Ameritrade (NYSE: AMTD), and Infosys (NYSE: INFY) [to move over to the NYSE from NASDAQ]?  Did you actively court them, or did they all just have a collective Road to Damascus moment?

Cutler:  We had sixteen companies that announced transfer to NYSE from NASDAQ in the US in 2012.  Since 2000, NYSE has won 213 transfers and NYSE MKT has won 9 transfers representing a combined $537.7 billion in total market capitalization.  So we continue to see a significant flow of companies that come to our platform.  The top reasons given are (1) a better global partner, (2) leveraging the branding and visibility that comes with the NYSE platform, and (3) being a part of the leading issuer community in the world.  We do a lot to connect our community members to one another for business purposes as a key part of our strategy.

Slepko:  While also a popular destination for DRs, is the London Stock Exchange only successful because US regulators have been actively undermining America’s own position?

Cutler:  According to Dealogic, the LSE raised approximately USD 5 billion through December in IPO capital, which was behind Hong Kong, Kuala Lumpur, Shenzhen,Tokyo, and slightly above Shanghai and Singapore.

Slepko:  So, it seems LSE overall isn’t doing so hot.  Do you see that trend continuing?

Cutler:  I think it is representative of the underlying growth in their regions.  I think Europe as a whole is going to continue to be a challenging market for domestic offerings.  That’s a significant number of IPOs that go public on regional exchanges – including our own [Euronext].  Markets are growing in Latin America, Eastern Europe, Asia, and in the US.  

[continued in NYSE Steals NASDAQ’s Thunder, Asian Exchanges Emerging Challenge]




Nick Slepko (hukgon) has no position in any company mentioned here at the time of publication.  The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend TD AMERITRADE Holding and NYSE Euronext. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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