New York, March 12: In a move to challenge the mighty New York Stock Exchange, America's two other main stock markets are discussing a possible merger, The New York Times and Wall Street Journal reported. A merger between the Nasdaq Stock Market and the American Stock Exchange would have great benefits for both exchanges, both of which have been struggling to compete with their more prestigious and influential rival. The Times and Journal reported the merger talks, citing unidentified sources, on their web sites late Wednesday and early Thursday. The Times said many details of the possible merger remain unresolved, but the most likely scenario called for creating a holding company under which the two exchanges would continue to operate separately.The spokesmen for the Nasdaq stock exchange did not answer telephone calls from The Associated Press to their homes late Wednesday seeking comment. But Nasdaq spokesman Michael Jones told the Journal that ``the organization is exploring a number of initiatives, including the possibility of proposing a transaction which would seek to maximize the efficiencies of both the Nasdaq and the American Stock Exchange through a combination of both organizations''.
A merger would give a tremendous boost to Nasdaq market's efforts to raise its low-profile among investors and companies. The exchange's image has suffered following charges of price-fixing and collusion among dealers. The American Stock Exchange, meanwhile, has lagged further and further behind the two larger exchanges, losing out both in new listings of companies going public. The American Exchange, like the NYSE, remains an `open outcry' market where dealers make trades in person with shouted bids.
The Nasdaq, by contrast, has no trading floor and instead uses a computer network to trade stocks. The NYSE has been luring away prestigious companies from its two rivals in recent years. In 1996, America Online, the country's leading online service company, moved to the NYSE from Nasdaq. American Stock Exchange has also lost The New York Times Company to the NYSE. The AOL move was a significant boost for the NYSE's efforts to attract more high-tech companies, which have normally favored listing their shares on the Nasdaq exchange.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
