They want to be the next Nasdaq, but there’s a good chance they will
languish and fail,” says one in-house counsel. When Nasdaq was set up in
1971, it was intended as a secondary exchange for over-the-counter trades
and growing companies that couldn’t meet the standards of the New York Stock
Exchange. Nasdaq now hosts a greater volume of trades per hour than any
other stock exchange (approximately 1.8 billion).
It’s a success story that exchanges in Asia would like to replicate. But so
far launches like Hong Kong’s Growth Enterprise Market (Gem) have been damp
squibs. In 2008, 47 companies listed on Hong Kong’s main board; Gem
attracted two. However, undiscouraged, Shenzhen and Tokyo are reportedly
planning secondary boards. Singapore relaunched its secondary board last
year and Hong Kong is rethinking Gem.
Lawyers polled for this month’s Big Question are not optimistic about...