Chinese firms flocking to list on NY's Nasdaq

CHINA is very likely to become Nasdaq's biggest source of non-US listings by the end of this year, NASDAQ Stock Market Vice Chairman Michael Oxley said.

Although Oxley declined to give a specific number, at least 23 additional Chinese firms need to be listed by the year's end for China to catch up with Israel, Nasdaq's current biggest source of non-US listings. Israel lists about 70 companies on the New York market.

Forty-seven Chinese companies have been listed on Nasdaq so far, 13 in 2007 and nine in 2006, said Oxley.

The stock market chief is best known as a co-author of the Sarbanes-Oxley Act, which tightened US rules on financial reporting and governance.

The measure came in response to a string of corporate scandals, including the Enron debacle. Some companies, however, have complained that the strict rules have led to enormous auditing expenses.

Oxley said the measures haven't discouraged Chinese companies from listing on Nasdaq, although bourse president, Bob Greifeld, said last year that the act's provisions were hindering efforts to attract international listings.

"It's a combination of accessing the most liquid and visible market in the world and, I guess you could call it, the prestige of listing with a market that has such high standards," Oxley said.

"I think they aspire to play in the big leagues, and they know they have to meet these requirements to do so."

"So instead of whining or backing off, they have made a determination that this is a competitive advantage to them in the marketplace to say they have made a decision to meet these higher standards."

Furthermore, the auditing measures have been modified from one standard for all companies to different standards based on a company's size and the risk that it entails, he said.

"It (the standard) will help Nasdaq attract more listings, including those in China," he said.

Chinese companies on Nasdaq include Internet search engine Baidu.com Inc, Web portals Sina.com Corp and Sohu.com Inc. To attract more Chinese listings, Nasdaq is applying to open a representative office in Beijing.