NYSE Chairman Urges Foreign Companies to List on Market

LONDON — Two weeks into his new job, New York Stock Exchange Chairman Richard A. Grasso began a global sales pitch to urge foreign companies to list on the stock market, a top priority of his tenure.

“It is the global product base that will gradually change the New York list,” Grasso said Wednesday during his first trip abroad as head of the world’s largest stock market.

Grasso was in London and Rome this week to meet with European exchange leaders and government officials, including Bank of England Governor Eddie George. He was also visiting executives from companies who seem like good prospects for listing on the exchange.

For the exchange, potential non-U.S. pickings far exceed those available domestically, where increased competition from the computerized Nasdaq stock market and other comers are a growing threat to the NYSE.

Grasso says there are 2,300 foreign companies that could probably meet the financial tests for listing on the NYSE. By adding the top 700 of these to the Big Board, the exchange would increase the value of its listed companies by $4 trillion, to $9.1 trillion.

That is around 10 times the potential new market that NYSE executives are pursuing in the United States, Grasso told a group of financial journalists.

The exchange’s short-term goal is to double its current foreign listings, now at about 230 companies. Grasso said he can do this in two to three years, noting the number has already doubled over the past 3 1/2 years.

The foreign companies have become some of Wall Street’s most hotly traded stocks. The British drug maker Glaxo was the most active NYSE share in 1992. Last year, Telefonos de Mexico had the most shares traded.

For a foreign company seeking to list in the United States, the big lure is a huge pool of investors with lots of cash.

The big drawback is the requirement that listed companies comply with U.S. accounting rules, a process that can be complicated and expensive. This is not a problem in many other markets--companies choosing to list on the London Stock Exchange, for example, find the accounting standards less stringent.

Often, corporations from the so-called “emerging markets” of the Third World find this hurdle less burdensome because they virtually are starting from scratch when they seek to go public and set up their bookkeeping.

“You sort of have less of an issue with an Indonesian or a Chinese company than you have with a developed nation, like Germany,” said Robert G. Britz, group executive vice president of the NYSE.