Nasdaq chief shrugs off turmoil in tech-heavy market

Nasdaq chief shrugs off turmoil in tech-heavy market
ENS ECONOMIC BUREAU

MUMBAI, APRIL 6: Nasdaq president Alfred Berkeley on Thursday shrugged off this week's turmoil on the tech-heavy market and said the participation of a large number of investors was contributing to the volatility.

"By and large, the large scale participation of investors is leading to volatility... It is the natural consequence as large number of new people are coming with their savings to participate," Berkeley told a news conference.

He added: "... when the Nasdaq lost 100 points a few years ago, there was a crisis. Now, loss of 100 points does not matter."

On volatility and the effect of the Nasdaq on Indian markets, he said, "When one stock exchange sneezes, the other catches a cold." He felt volatility was by-product of large number of participants. "People should be able to trade when they want to. And if volatility be the price for it, so be it," he said.

The Nasdaq Stock Market is opening a representative office in the country by the year end. The office will service companies listed on its exchange and others planning to raise overseas capital, president Alfred R Berkeley said on Thursday.

Berkley termed the rupee convertibility issue as a major stumbling block to having a global marketplace in India. The exchange is currently opening at Europe and Japan, and is holding talks with Australia, Singapore and Hong Kong. He said plans to open to a Nasdaq-India were definitely behind Japan.

"We need to see if the systems we are implementing in Japan and Europe are successful technically. If we are successful, we can extend the same to other time zones," he said. Nadsaq has entered into joint venture with an Indian company, SSI Technologies, to create internet-based trading and market systems for Nasdaq-Europe and Nasdaq-Japan. He was especially bullish about the success of the Japan venture. "If we are successful, we might introduce a 22-hour trading day," he added.

Berkley said he expected a dozen domestic companies, of the three to four dozen who were making enquiries, to list on the Nasdaq by the year end. The exchange, which has only two Indian companies to date, wants to take a long term view and attract growth companies in biotech and internet.

Answering a query on whether proposed Nasdaq-NYSE merger which fell through, he said the Nasdaq was not spending a lot of time thinking about older markets. The competition was new emerging exchanges. "Somebody with a Sun computer in a closet might be quicker and faster than we are. So we think like a web company," he said, adding that Indian markets were way ahead of others in automation. "The US has not automated as aggressively."

He felt markets were like any other business, and those which were good and could scale could raise money anywhere. The Nasdaq-Softbank partnership would bring additional partnership with dealers. The policy of the exchange was broad ownership and broad participation. No one shareholder would hold over five per cent in the entity, he said. The exchange is currently in the process of changing its ownership structure in US.