Nasdaq, American Se May Merge

In a move to challenge the mighty New York Stock Exchange, Americas two other main stock markets are discussing a possible merger, the New York Times reported.

A merger between the Nasdaq stock market and the American Stock Exchange would have great benefits for both exchanges, both of which have been struggling to compete with their more prestigious and influential rival.

The Times reported the merger talks, citing unidentified sources, on its web site on Wednesday. The Times said many details of the possible merger remain unresolved, but that the most likely scenario called for creating a holding company under which the two exchanges would continue to operate separately.

 

Spokesmen for the Nasdaq Stock Exchange did not answer telephone calls seeking comment.

A merger would give a tremendous boost to the Nasdaq markets efforts to raise its profile among investors and companies. The exchanges image has suffered following charges of price-fixing and collusion among dealers.

The American Stock Exchange, meanwhile, has lagged further and further behind the two larger exchanges, losing out to both in new listings of companies going public.

The Amex, like the NYSE, remains an open outcry market where dealers make trades in person with shouted bids. The Nasdaq, by contrast, has no trading floor and instead use a computer network to trade stocks.

The NYSE has been luring away prestigious companies from its two rivals in recent years.

In 1996, America Online, the countrys leading online service company, moved to the NYSE from Nasdaq. Amex has also lost the New York Times Co to the NYSE.

The AOL move was a significant boost for the NYSEs efforts to attract more high-tech companies, which have normally favoured listing their shares on the Nasdaq exchange.