Split businesses for overseas listing - Nasdaq VP

By K. T. Jagannathan

CHENNAI, OCT. 2. The Vice-President and Managing Director (Asia Pacific) of the Nasdaq Stock Market, Mr. Patrick Sutch, feels that the Indian conglomerates pining for a overseas listing must split their businesses into different entities and list each one of them independently.

By doing so, Mr. Sutch feels, the Indian conglomerates can get better valuations for each of their businesses. Valuing groups like Reliance and Tata with their diverse businesses could prove a daunting task for investment bankers and the like. Hence, Mr. Sutch has advocated splitting of businesses before taking them for overseas listing.

In an interview with this correspondent here recently, the Managing Director said he had, in fact, advised a New Zealand company which was set to join the Nasdaq bandwagon to de-couple its white goods business and healthcare activity before seeking listing. Asked how his proposal was received in India, he said, ``I have not been kicked out of the door."

Mr. Sutch said Nasdaq rarely opened representative office. The rep office in Bangalore was opened in February this year and headed by Mr. Ghanshyam Dass, Director (South Asia). ``It is very important for us to look after our three Nasdaq-listed Indian companies. We will also look for new companies,'' he said. ``Our job is to continue talking to people here," he said. Nonetheless, Mr. Sutch hinted that the rep office in Bangalore could, over a period, prove a marketing base for Nasdaq to scout for Asian clients. ``Asia is currently marketed out our London office," he said.

Queried if there existed a possibility for Nasdaq to tie up with any major stock exchange in India, he said that would have to wait for full convertibility of the rupee. He felt that the regional exchanges had their roles in a different era. In an age of connectivity, however, he presaged India heading towards a system where there would be two primary exchanges and a small cap exchange (like OTCEI).

Mr. Sutch said Nasdaq would be more than willing if asked to work with the Securities and Exchange Board of India (SEBI) to put in place a fail-safe regulatory system. To a question, he said the arbitrage business in the Indian stock market would evaporate. In this context, he said regulatory regime in the U.S. which allowed a company to list its stock only on one exchange.

Questioned on where the markets would head in the coming days, Mr. Sutch said, ``Markets have always recovered and gone up." His advice was ``just hold on." Asked as to how long the current trough would last, he pointed to Mr. George Soras what had indicted that a recovery in the second quarter of next year.

The Managing Director did not rule out the possibility of the two premier exchanges in the U.S. - New York Stock Exchange and Nasdaq - coming together if all the European markets come together and consolidate. In that eventuality, the SEC itself could ask ``us to talk," he said. At the moment, however, SEC was happy that the two exchanges competed.

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Section  : Business
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