Ainda acerca do cross listing
Enviado: 13/1/2004 21:19Source:
FinanceProfessor News
January 13, 2004
Cross listings have been in the news as 6 NYSE firms began trading on both the NYSE and the Nasdaq. Why would a firm want to do this? One reason is that increased market competition may drive transactions costs. As FinanceProfessor Espen Eckbo points out, this will force the NYSE to stay on top of things and speed its reform and modernization process.
http://msnbc.msn.com/id/3939339/
http://www.globeandmail.com/servlet/Art ... TopStories
While the NYSE to Nasdaq cross listing made quite a bit of news, cross listing itself is not anything new. For instance, my favorite Institutions or microstructure paper at the Southern Finance Association’s Meeting was by Kenneth Small. He looks at the 120 Nasdaq firms that are cross-listed on the American Stock Exchange. (By the way, these 120 stocks are comprised of Nasdaq 100 plus 20 have Nasdaq stocks that are in the S&P 500) He began by examining what happened over three event dates (initial announcements, SEC approval, and the actual day of cross listing) he found that there was an almost unbelievable 3% positive abnormal return. Then paradoxically he finds that spreads actually reverse in the first months of cross listing. While the costs have since fallen, the puzzle remains. Why did they start off so high? Was market fragmentation leading to high operating costs or a more severe adverse selection problem?
Unfortunately I could not link to the article, but he is at the University of Tennessee if you would like to email him.
Does the extra monitoring from bondholders make up for the added risk of the financial leverage? NO. That is the answer provided by Krishnan, Ritchken, and Thomson. They examine credit spreads and find that the additional monitoring provided by subordinated debt holders does not "control risk taking" and thus "a mandatory subordinated debt requirement for banks is unlikely to provide the purported benefits of enhancing risk monitoring or controlling risk taking."
http://papers.ssrn.com/sol3/papers.cfm? ... _id=465181
In September 2002 the SEC Regulation ATS required any market that has greater than 5% of the trades in a security comply with additional regulations including the way the shares trade. The Island ECN, a market that trades over 5% in three ETFs, chose rather than simply complying with these rules, they would scale back the transparency on all the trades in these securities to get around the rules. Hendershott and Jones now find that when the Island quit sharing its limit order book (i.e. “went dark”), traders took their trades elsewhere and market efficiency suffered (in spite of lower pricing by the Island). (BTW great description of ETFs and ECNs. Those two sections alone are worth the price of admission!)
http://papers.ssrn.com/sol3/papers.cfm? ... _id=396661
Need more to worry about? In spite of fewer people having pensions, the Pension Benefit Guaranty Corp. has a record deficit. IN fact early reports suggest it may be over $10 billion. What does this mean? The PBGC insures pensions. If they cannot make payments AND there is no government bailout, pensioners may be in the same boat as retirees with defined contribution plans.
http://money.cnn.com/2004/01/13/retirem ... /index.htm
Here is one from the vaults (pun intended). BCCI is back in the news! BCCI is the large international bank that was closed by regulators in the early 1990s for fraud, poor management, money laundering, and just about anything else you can imagine. Well, now creditors of the firm are suing the Bank of England for letting the bank operate when it was so poorly run.
http://news.bbc.co.uk/1/hi/business/3383461.stm
http://news.bbc.co.uk/1/hi/business/3391379.stm
I am surprised and without knowing all the details, disappointed in this case. Morgan Stanley was found guilty and is being forced to pay over $38 million for defaming LVMH. The supposed reason for "talking down" the world's largest luxury goods maker? Morgan Stanley had an investment banking relationship with LVMH’s competitor Gucci. (I guess either way the case is bad news) If they are guilty shame on tem, if not, it is a bad precedent. http://www.usatoday.com/money/industrie ... nley_x.htm
http://news.bbc.co.uk/1/hi/business/3390069.stm
FinanceProfessor News
January 13, 2004
Cross listings have been in the news as 6 NYSE firms began trading on both the NYSE and the Nasdaq. Why would a firm want to do this? One reason is that increased market competition may drive transactions costs. As FinanceProfessor Espen Eckbo points out, this will force the NYSE to stay on top of things and speed its reform and modernization process.
http://msnbc.msn.com/id/3939339/
http://www.globeandmail.com/servlet/Art ... TopStories
While the NYSE to Nasdaq cross listing made quite a bit of news, cross listing itself is not anything new. For instance, my favorite Institutions or microstructure paper at the Southern Finance Association’s Meeting was by Kenneth Small. He looks at the 120 Nasdaq firms that are cross-listed on the American Stock Exchange. (By the way, these 120 stocks are comprised of Nasdaq 100 plus 20 have Nasdaq stocks that are in the S&P 500) He began by examining what happened over three event dates (initial announcements, SEC approval, and the actual day of cross listing) he found that there was an almost unbelievable 3% positive abnormal return. Then paradoxically he finds that spreads actually reverse in the first months of cross listing. While the costs have since fallen, the puzzle remains. Why did they start off so high? Was market fragmentation leading to high operating costs or a more severe adverse selection problem?
Unfortunately I could not link to the article, but he is at the University of Tennessee if you would like to email him.
Does the extra monitoring from bondholders make up for the added risk of the financial leverage? NO. That is the answer provided by Krishnan, Ritchken, and Thomson. They examine credit spreads and find that the additional monitoring provided by subordinated debt holders does not "control risk taking" and thus "a mandatory subordinated debt requirement for banks is unlikely to provide the purported benefits of enhancing risk monitoring or controlling risk taking."
http://papers.ssrn.com/sol3/papers.cfm? ... _id=465181
In September 2002 the SEC Regulation ATS required any market that has greater than 5% of the trades in a security comply with additional regulations including the way the shares trade. The Island ECN, a market that trades over 5% in three ETFs, chose rather than simply complying with these rules, they would scale back the transparency on all the trades in these securities to get around the rules. Hendershott and Jones now find that when the Island quit sharing its limit order book (i.e. “went dark”), traders took their trades elsewhere and market efficiency suffered (in spite of lower pricing by the Island). (BTW great description of ETFs and ECNs. Those two sections alone are worth the price of admission!)
http://papers.ssrn.com/sol3/papers.cfm? ... _id=396661
Need more to worry about? In spite of fewer people having pensions, the Pension Benefit Guaranty Corp. has a record deficit. IN fact early reports suggest it may be over $10 billion. What does this mean? The PBGC insures pensions. If they cannot make payments AND there is no government bailout, pensioners may be in the same boat as retirees with defined contribution plans.
http://money.cnn.com/2004/01/13/retirem ... /index.htm
Here is one from the vaults (pun intended). BCCI is back in the news! BCCI is the large international bank that was closed by regulators in the early 1990s for fraud, poor management, money laundering, and just about anything else you can imagine. Well, now creditors of the firm are suing the Bank of England for letting the bank operate when it was so poorly run.
http://news.bbc.co.uk/1/hi/business/3383461.stm
http://news.bbc.co.uk/1/hi/business/3391379.stm
I am surprised and without knowing all the details, disappointed in this case. Morgan Stanley was found guilty and is being forced to pay over $38 million for defaming LVMH. The supposed reason for "talking down" the world's largest luxury goods maker? Morgan Stanley had an investment banking relationship with LVMH’s competitor Gucci. (I guess either way the case is bad news) If they are guilty shame on tem, if not, it is a bad precedent. http://www.usatoday.com/money/industrie ... nley_x.htm
http://news.bbc.co.uk/1/hi/business/3390069.stm