Nasdaq rethink after Asia write-off

THE global bear market is threatening to savage plans by the Nasdaq screen-based stock exchange to use Asia as a key foundation block for a worldwide marketplace. After writing off $20m (£13m) of its investment in a joint venture in Japan, the US exchange has said it is re-examining its future there.

Explaining the write-off, Nasdaq chairman and chief executive Hardwick Simmons said that the company had concluded that its investment in Nasdaq Japan would not return value in the foreseeable future.

Nasdaq in New York has set the end of this month as a deadline on a decision on action over its Japanese operations. Its partner in the Japanese venture, the Softbank internet investment group, said it planned talks with Nasdaq in an effort to ensure stability in the market. The Japanese venture was launched in June 2000, just before the big bull market fizzled, and was planned as part of a global trading system that would facilitate dealing stocks 24 hours a day.

It was hoped this would attract a large number of companies to list on the Japanese market, which is managed by the Osaka Securities Exchange.

Although the number of quoted securities has grown to 98, including US stocks such as Starbucks, this has not provided enough trading to make the operation profitable, say Japanese analysts.

By the end of December 2001 Nasdaq's Japanese operations had accumulated losses of 5.2bn yen (£27m). A pilot programme in which seven Nasdaq stocks are traded in Hong Kong is also showing disappointing returns.