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To: ms.smartest.person who wrote (1551)	8/16/2002 12:25:37 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 5140

Nasdaq to Withdraw from Japan, Osaka In Aug. 16 — By Taro Fuse and Nicole Maestri OSAKA/NEW YORK (Reuters) - The board of money-losing Nasdaq Japan Inc said on Friday the venture would cease operations, ending an ambitious plan by its 43 percent owner, the U.S. Nasdaq Stock Market, to build a 24-hour global stock market. The Osaka Securities Exchange, which runs the day-to-day operations of the market, Japan's second biggest for start-ups, said it would terminate contracts with its U.S. partner on October 15 but continue to run the Nasdaq Japan market. "We're withdrawing from Japan," John Hilley, chairman and chief executive of Nasdaq International Inc, said in New York. "The story of Japan is bad timing and bad market conditions." Japanese stocks are trading near two-decade lows, and many of the start-ups Nasdaq Japan had hoped to attract and nurture are struggling to survive after the bursting of the Internet bubble. "This was a truly difficult decision for all members of the board to take," said Yoshihisa Katsuya, head of Nasdaq Japan Inc, which is responsible for planning and marketing of the venture. The OSE said the Nasdaq Japan market would be renamed the "Japan New Market." The Nasdaq brand can be used until the end of the year. "According to our contract, whichever is in trouble may call for termination of the tie-up. It was Nasdaq Japan which gave up first," OSE President Goro Tatsumi said at a news conference. "We've tried hard in the past two years, but in vain." Speculation of a withdrawal by U.S. Nasdaq has been rife since last week when the number-two U.S. stock market reported a 55 percent drop in second-quarter earnings, largely due to the erosion of its investment in Nasdaq Japan Inc. SHORT HISTORY U.S. Nasdaq and Japanese Internet investor Softbank Corp set up Nasdaq Japan in 1999. Each own 43 percent. Several leading Japanese, European and U.S. securities houses hold the remaining 14 percent. Trading began in June 2000, but the market has failed to live up to expectations. The partners had expected 150 firms to list in the first year to June 2001, but so far only 98 have come aboard, including Starbucks Coffee Japan Ltd, a unit of Starbucks Corp. Another three are scheduled to list in coming weeks. One of the listed companies, info-tech firm ITX Corp, said it was considering lodging a suit over the wind-up decision, saying it had chosen to list on the market as part of its global strategy. "We are feeling very dissatisfied about the decision and we are also very dissatisfied toward Nasdaq, Softbank, and the other parties involved," a spokesman said. "We're considering taking some sort of legal action." Nasdaq Japan Inc racked up a cumulative loss of 5.2 billion yen ($44.31 million) to the end of 2001 despite an increase in capital to 4.16 billion yen from an initial 600 million yen. Softbank said it expected the impact on its earnings from the winding up of the venture to be limited to its total investment of 1.2 billion yen. U.S. Nasdaq's Hilley said its pullout from the region would not change the company's vision of one day operating a global exchange, and he said Nasdaq remained committed to its ventures in Europe. Hilley will hold a news conference in Tokyo on Monday. STRUGGLING START-UPS Analysts said the loss of the Nasdaq brand could make the market run by the OSE less attractive, encouraging some listed firms to leave for other markets such as the rival Mothers market operated by the Tokyo Stock Exchange (TSE). "Regardless...we have had in mind the possibility of listing in other markets when our business stabilizes," said Akinori Matsuo, a spokesman at digital image software firm Celartem Technology Inc. The Jasdaq market, operated by the Japan Securities Dealers' Association, is Japan's biggest market for venture firms and has relatively high standards for listing. More than 900 firms are listed on the exchange, which has a total market capitalization of 8.9 trillion yen ($76 billion) compared with 1.3 trillion yen ($11 billion) for Nasdaq Japan. Most companies prefer Jasdaq to Nasdaq Japan due to higher liquidity in its trading system, in which market makers play a key role. Out of 72 new listings so far this year, 38 venture firms listed their shares on Jasdaq and 16 on Nasdaq Japan. "We will welcome the transfers (of issues from Nasdaq Japan) as long as they meet our standards," a Jasdaq spokesman quoted Jasdaq president Nobuo Kurakazu as saying. "Also, we will consider shortening the process of screening and simplifying documentation," he said. ($1=117.35 yen) Copyright 2002 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Copyright © 2002 ABC News Internet Ventures. Click here for Press Information, Terms of Use & Privacy Policy & Internet Safety Information applicable to the site. abcnews.go.com