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Wednesday, Oct 09, 2002

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Nasdaq gives Infosys top marks on `market quality'

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THE Nasdaq Stock Market has prepared a case study to underscore what it has called `market quality' with regard to the leading Indian company listed on it: Infosys.

The Bangalore-based IT major is said to have scored favourably in terms of market capitalisation when compared to such companies as Wipro, MTNL and VSNL - all of which are also listed in the US (New York Stock Exchange).

Infosys, Nasdaq has maintained, had a market cap of $7.3 billion, followed by its nearest competitor, Wipro, which commands a market cap of $6.5 billion.

It takes over $2 million of trading to move the Infosys stock price by one per cent, over three times more than the liquid NYSE stock, the study has pointed out on the basis of January-August 2002 data collected by FactSet Research Systems.

Mr Patrick Sutch, V-P and MD (Asia-Pacific), Nasdaq, during a recent visit here, claimed that the exchange had a competitive market-making infrastructure. This helped it put a check on spreads and costs.

It may be mentioned here that based on Nasdaq Economic Research statistics (again for January-August 2002) the average spread relative to price is lower in the case of Infosys - 0.6 per cent - when compared to the likes of Wipro (0.7 per cent), VSNL (0.8 per cent) and MTNL (1.2 per cent).

On the institutional holdings front, the IT company has a good number of US institutions holding the stock. Data for September gleaned from EDGAR Online indicate that this number is 74 in the case of Infosys compared to 53, 43 and 35 in VSNL, Wipro and MTNL respectively.

"Thanks to the active involvement of our market makers, the stock has managed to attract coverage from more US analysts," Mr Sutch said. Infosys has over half-a-dozen of such analysts - Bank of America, Credit Suisse, Goldman Sachs, Merrill Lynch, SG Goven, UBS Warburg and Mambricht & Co.

Nearer home, the exchange said that IndigoMarkets, the joint venture between Nasdaq Global Holdings and the India-based SSI Ltd, was looking for buyers for its solutions developed for Nasdaq Japan. This follows the exit of Nasdaq from the Asian country.

Information sourced from FactSet Research showed that about 60 per cent of new non-US listings (till about mid-July 2002) had come on Nasdaq since 1992. At the moment, there are around 60 companies from Asia compared to 120 from Europe and nearly 80 from West Asia.

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