Nasdaq blames economic slump in Japan for pullout
( 2002-08-19 16:13 ) (7 )

The bad economic conditions and the failure to launch a new trading technology in Japan were behind Nasdaq's decision to pull out of the country, said John Hilley, chairman and chief executive officer of Nasdaq International Inc. on Monday.

"We came to the conclusion that given the financial outlook and the inability to launch the new system, that the decision had to be to move toward a secession of operations of Nasdaq Japan," Hilley said.

Nasdaq Japan Inc. and the Osaka Securities Exchange (OSE), where Nasdaq-listed firms have been traded, announced last Friday they were terminating their business cooperation agreement, effective Oct. 15.

The Osaka bourse will continue to operate the Nasdaq Japan Market, tentatively renamed "Japan New Market." Listing, trading and other market rules will remain intact, and the Nasdaq brand may be used until the end of the year.

The move followed two loss-making years for Nasdaq Japan, which is owned 43 percent each by Japanese Internet investor Softbank Corp. and Nasdaq Stock Market Inc. of the United States, operator of the world's largest electronic stock market.

Hilley said Nasdaq Japan will "move toward dissolution at a time to be determined later," once the transition is complete.

Hilley said the decision to leave Japan is no indication that Nasdaq is abandoning its strategy to extend its operations internationally by establishing Nasdaq-affiliated markets in Asia and Europe.

"The decision is based on the particular set of economic and market conditions we confront (in Japan)," Hilley said.

"It is not an indication that our commitment to our international strategy has changed," he added.

No other Asian city is currently being considered as an option for a Nasdaq market, Hilley said.

The Nasdaq Japan Market, managed by Nasdaq Japan, opened in June 2000 within the OSE, targeting primarily Japanese startup ventures. About 100 companies are listed on the market.