The NYSE is attracting more and more major listings and is beating Hong Kong and London, the other two major financial centers, by a long shot.
In 2006, Senator Charles Schumer and Mayor Michael Bloomberg expressed their concern in an article in the Wall Street Journal. The background? Both feared that New York was losing its leading economic role. The previous year, only one of the 24 largest IPOs had taken place there.
17 years later, New York’s rulers have little to worry about, writes The Economist.
In the battle between the world’s global financial centers, The Big Apple has no rival – and when it comes to stock markets, it easily expands its leading position.
On March 3, Arm, a British semiconductor company owned by Japanese investors in Soft Bank, announced that it would list the company solely in New York – despite a campaign from the British government to encourage a listing in London.
On March 4, CHR, a London-listed building materials company, announced that it would move its main listing to New York. The same week, heavy chemical company Linde left the Frankfurt stock exchange but kept its listing in New York.
Chinese companies on the way
Now, Chinese companies are also on the way, after a pause of almost two years. New regulations offer a way for more Chinese companies to list abroad.
Last month, electronics company Hesai Group raised $190 million on Nasdaq in the largest Chinese listing since 2021.
Fashion company Shein is also reportedly on its way to the NYSE.
New York’s success is a reflection of Hong Kong’s and London’s failures.
They are the only stock markets that can compete with New York but they do not attract nearly as much business.
Already in 2019, NY took in three times as much business as its two largest competitors.
Today, the listing queue in Hong Kong contains few companies outside of China, while London is struggling with its own problems.
A common British complaint is that the pension funds and insurance companies that exist invest remarkably little of their assets in British stocks, contributing to a lack of a natural base of investors.
Shanghai and Shenzhen are huge stock exchanges with a combined market capitalization of over $12 billion.
But the ruling Communist Party is a constant threat in investors’ eyes, and the Chinese stock markets still behave irrationally.
An indication of this is that shares in companies listed on the Chinese mainland and in Hong Kong are almost 40 percent more expensive on the mainland.
Japan, with a stock market in Tokyo with a market capitalization of about $5.4 billion, also fails to attract international business today. Amsterdam and Dubai have grown stock exchanges but are still seen as regional or met with skepticism.
Singapore, which surpassed Hong Kong in last year’s Global Financial Centers Index, is a growing hub for wealth management but a minor player in stocks.
Instead, the financial capital flow begins and ends in New York.
This applies increasingly to both American and European companies and, in general, soon also to Chinese companies.