The Telegraph
Since 1st March, 1999
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Nasdaq pins high hopes on new trading system

New York, Aug. 27: During the height of the bull market, Nasdaq ran ads proclaiming itself the stock market for the next 100 years.

But the new century is off to a rough start for the No. 2 US equity trading venue.

Wall Street’s plunge since March 2000 has decimated the big technology stocks for which Nasdaq is best known. And its overseas ventures have suffered deep losses, forcing the closure of its only highly touted Japanese trading operation this month.

Now Nasdaq, under chairman Hardwick Simmons and president Richard G. Ketchum, is pinning its hopes for growth in part on a revamped electronic trading system, known as SuperMontage, which is intended to lure business back from rival trading networks that have sprung up in recent years.

The Securities and Exchange Commission is expected to vote Wednesday on final approval for SuperMontage. Nasdaq plans to roll out the system almost immediately if the SEC gives its approval.

In a recent interview with the Los Angeles Times, Nasdaq’s Ketchum said SuperMontage is critical for the market’s long-term success.

Some Nasdaq observers say the early reviews that traders and investors give SuperMontage also could be critical in determining Nasdaq’s timetable for its long-planned initial public stock offering.

Nasdaq is spinning itself off from the National Association of Securities Dealers into a private company, and hopes one day to enjoy a glitzy IPO.

As a result of two private placement stock sales, some Nasdaq shares recently began trading on the electronic Bulletin Board, a market considered a rung below the main Nasdaq market. Nasdaq officials frowned on decision of the private-placement share owners to put the stock up for public sale, fearing it could crimp the IPO plans.

The shares traded as high as $ 15.50 on July 10, but since have fallen to $ 10.87 as of Monday.

Ketchum, in the interview, discussed SuperMontage, the IPO plans and other issues facing Nasdaq. Excerpts:

Q: Do you think the image of Nasdaq, which was closely associated with the “new economy” and with tech stocks, has been damaged by the long decline in that market sector'

A: Undoubtedly, there will always be some impact when your index and many of your companies have lost a significant amount of their value over a period of time. But if I ever have to have a choice between being involved with a large percentage of companies that are redefining their sector or industry—whether that be technology, biotechnology or Starbucks—I’ll take bets on those companies.

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