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'We expect to list five, maybe more, Indian companies' –Alfred R Berkeley, III, President, Nasdaq

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DQI Bureau
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A 1968 MBA from the University of Pennsylvania’s Wharton School,

Alfred R Berkeley III, has been associated with the financial industry since his graduation. He was appointed to his current hot seat as President of The Nasdaq Stock Market, Inc, in 1996 and since then has been leading the Nasdaq charge across the technology world. With plans to start Nasdaq across the globe with Japan and Europe in the pipeline, Berkeley is now taking the tech exchange global. Prior to joining Nasdaq, he was with Alex Brown & Sons. Visiting India recently, he spoke to DATAQUEST Group Editor, Prasanto K Roy about Nasdaq’s plans for the region, and more. Excerpts:

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l The

past weeks have seen tech stocks severely hit on the Nasdaq and elsewhere. Is

this the brick and mortar world making a comeback, or the end of those

staggering valuations?

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I think there are two things at

work. One is that more and more companies have been a little bit slower to show

their web activities, but now they are beginning to do so–so in that way it is

a comeback. However I would not underestimate the strength of traditional

companies as they begin to deploy their web strategies. The other thing is that

in the early days of the web companies, there was a scarcity of value and there

were very few companies in the dotcom realm–so investors were trying to find

ways to participate in the web. Now as more and more dotcom companies are

tapping the market, the demand-supply gap is being filled up and investors are

getting much choosier.

How important is India to Nasdaq?

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India is going to be a very

significant market for the whole world, and Nasdaq needs to be here. We need to

have a presence here, and that’s one of the key reasons for my visit. We want

to open our regional office in India.

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How many companies do you expect

to see listed on the Nasdaq by the year-end?

I don’t know what the future

figures are going to be, but I can tell you the current facts. As of now we are

talking to several companies and about a dozen appear to be quite serious about

listing with us. We will be delighted with four to five companies listing their

shares, but it could be more.

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Apart from the few big names of

the Infosys genre, is India big enough a brand to support other small tech

companies listing on the Nasdaq?

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Absolutely. Infosys and Satyam

have done wonders for American awareness of the growth potential in India.

At Nasscom 2000, both Nasdaq and

NYSE were very visible. What are your plans for promoting Nasdaq in India?

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In terms of specific efforts to

gain visibility, obviously we will have our office here, and we are going to

make a series of efforts to reach out and let people know that we are here. We

are yet to iron out the details.

Wipro is going for a NYSE

listing, not Nasdaq. It’s the definitive tech giant. Why do you think they

made such a choice?

Well I don’t know why

individual companies make their listing choices. We have several wonderful

markets in the US. However we think that our business model is particularly good

for growth companies. Again, I can’t speak for any company decision to choose

Nasdaq versus any other exchange in the US.

So should we expect many

brick-and-mortar companies with new e-strategies getting on to the Nasdaq?

Many are already on the Nasdaq

and other markets, and in many cases they are bringing their dotcom businesses

to Nasdaq as separate companies.

How significant a driver will the

dotcoms be in the future? Will they continue to heavily influence the stock

indexes, or would we see some correction?

I think that the web is a fairly

long-term phenomenon. One needs to understand that a significant portion of the

world’s economy is moving to a new lower cost curve. The web is similar to the

railroad industry about 150 years ago. The railroad moved the physical

distribution of goods and people to a new lower cost curve and profoundly

changed the economics of the world. The same thing is happening with the web and

it is profoundly changing the economics of the non-physical part of commerce. So

the risk is not in terms of whether the web will be around, but whether specific

companies are going to be around or not.

Nasdaq has been talking about

regional stock exchanges particularly in Japan and Europe. What is the status of

those, and are there any similar plans for India?

We hope to be trading in Japan in

July and hope to begin trading by the early part of next year in Europe. As of

now, we have no specific plans to create a Nasdaq relationship in India, but are

creating a regional marketing office in India as a first step towards creating

more visibility in the country.

Will there be a big shift in

trading volume away from brick and mortar exchanges to online or virtual

exchanges?

Well, the idea that you have to physically be in

one place to trade stocks is an obsolete one. I think that what counts is

gathering liquidity, and that’s most appropriately done electronically,

incorporating as many people as possible into the gathering process.  

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