'Reaction to Nasdaq movements not rational'

By Our Staff Reporter

HYDERABAD, APRIL 5. ``Volatility in Nasdaq is due to democratisation of access to the market seen in the U.S. for the last few years. It is a natural function of having a large number of people participating in the system'' observed Mr. Alfred Berkeley, President of Nasdaq Stock Market, adding that ``American people are used to volatility, though not to the extent seen yesterday (due to the Microsoft case)''.

Responding to a question at a press conference here on Wednesday, Mr. Berkeley felt that the reaction of the Indian stock markets to the developments on Nasdaq ``doesn't seem rational, but it is real''. Declining to predict the movements on the Nasdaq saying ``Everytime I do so I go wrong'', he however said that ``part of the volatility was very irrational, and part emotional''. He pointed out that 25 companies on Nasdaq accounted for 45 per cent of the trading, and hoped that there would be a `dispersal' in future.

On attempts by Nasdaq to internationalise its market, he said its trading would be activated in Europe soon, and in Japan in July. There was tremendous potential for Indian companies in biotech and life sciences (besides IT) on the Nasdaq. A small country like Israel had 98 of its companies listed on the Nasdaq, with market capitalisation of $100 billion. But only two Indian companies accounted for $50 billion.

About four to six Indian companies would be listed on Nasdaq this year, he felt.

Earlier addressing a cross section of Hyderabad's business community, he said Nasdaq would be looking at a 22-hour trading day in future once the European and Asian (Japan) markets were accessed and sufficiently developed.

Mr. Berkeley said institutional investors constituted 80 per cent of investments in the U.S., and maintained that ``It was not speculators, but strong institutional investors who know a lot about the industries'', he said.

``We tried to position Nasdaq as a market for growth and innovations and not tie it to a particular industry'', he said adding it was an exchange ``where you can get a seat based on what you know. It is a `knowledge test' and it doesn't take millions to buy a seat there. ''Of the 13,500 listed companies in the U.S., over 5,000 were on the Nasdaq. `It was for those not allowed in other exchanges,' he said.

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Section  : Business
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