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April 5, 2000

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The Rediff Business Interview/Alfred Berkley

'India has merged with global knowledge economy now. I see 7-8 Indian firms listing on NASDAQ soon.'

Alfred Berkley, president, NASDAQ Soon after the departure of the US President Bill Clinton, it is the turn of Alfred Berkley, president of America's infotech stock exchange, NASDAQ, to pay a visit to India.

That he should come calling at a time when the Indian stockmarkets are in a state of turmoil, following the meltdown in infotech stocks on NASDAQ, makes his visit that much more significant. The Bombay Stock Exchange's Sensex plummeted by over 360 points on Tuesday, primarily due to across-the-board selling triggered by the sharp fall in NASDAQ. He is on a hard-sell mission to woo Indian companies to list on NASDAQ.

Email this interview to a friendHe is a graduate from the Wharton School. He joined a finance-cum-technology company, Alex Brown, in 1972. He worked with the company till 1996, and then joined NASDAQ as president.

Alfred Berkley spoke to Neena Haridas about why he believes that India has merged with the global knowledge economy, why India is recognised as a nation that can create wealth through knowledge, and how many Indian companies may list on NASDAQ in the near future.

"How is NASDAQ sentiment?"
"Well, I prefer romantic comedies!"

This is how a conversation would have gone in the average Indian household ten years ago. Not anymore, though.

Today, NASDAQ, employee stock options, market capitalisation, and technology scrips - are part of everyday breakfast conversation.

What do you feel about Indian markets vis--vis the international bourses?

When NASDAQ is happy, Sensex is excited. When NASDAQ feels the blues, a pall of gloom envelops Indian bourses. This shows that India has finally merged with the global knowledge economy.

Berkley, with his two-member team comprising managing director Barbara Cosgriff and vice-president Asia-Pacific Patric Sutch, has already met bigwigs from Tata Consultancy Services, or TCS, Ranbaxy, Ernst & Young, GE Caps, and officials from the finance and commerce ministries in Delhi, Hyderabad, Bangalore and Bombay.

Is the talk about the infotech wave nothing more than hype?

Such talk makes it much more exciting. I agree there is a lot of confusion in the markets. When the initial euphoria ends, people start thinking 'Is it the right thing?' or 'Is it just a lot of noise?' But I want to tell them to stay put. Because, out there in the stock markets, it is the survival of the smartest. Over-smartness will not work.

The world is dependent on technology stocks. And India has been recognised and acknowledged for its ability to create wealth through knowledge.

This recognition first came in the Silicon Valley where the Indians made their presence felt immediately, and immensely.

Over 40 per cent of the start-ups in the Silicon Valley are by Indians. Now this knowledge is being used within India by Indians to create wealth. The great divide between old economy and the new economy has been established.

Before the software revolution, Indians used to work for Birlas and Tatas. Now things have changed. Software engineers are becoming millionaires in just three years. It's a new breed of entrepreneurs that has come up in India.

Do you plan to have a trading exchange in India?

Hi-tech trading on NASDAQ, the American infotech exchangeThe stockmarkets around the world are in a state of flux. However, we are trying to create a balance in the US. We are seeking to globalise NASDAQ. We will be setting up trading exchanges in Japan and Europe.

In India, however, there are no plans to set up an exchange till there is full convertibility here. But we'll set up a representative office, possibly in Delhi, to facilitate Indian companies to list on NASDAQ.

What do you think about the Indian stocks listed on NASDAQ?

India is on the move. Infy and Sify have performed wonderfully well on NASDAQ. There is a big appetite for fast-growing Indian companies.

I have immense faith in technology, and I am sure that the new world will be created on the technology platform. Investors today are looking at future growth, not past performance."

Success of Infosys Technologies and Satyam Infoway on NASDAQ has created a huge demand for Indian stocks among the US investors.

Do you see more Indian companies listing on NASDAQ in the near future?

This year more Indian companies will come to NASDAQ for listing. About 7 or 8 of them. Actually, we are talking to over a dozen Indian companies for a possible listing and I expect at least one-third of these to be listed this year itself.

And I am not just talking about infotech here. The entire span of knowledge-based industry is now growth-oriented. The new companies that will make waves on NASDAQ are likely to be from pharma, biotech, software, media and telecom sectors."

Currently, out of the 5,000 companies listed on NASDAQ, only two - Infosys and Satyam Info -- are Indian. Quite insignificant a number, compared to Israel's 98.

In the next two years, about 24 companies are expected to touch base at NASDAQ. That means these companies could raise well over $ 1 billion.

Some of the Indian companies reportedly looking for a listing abroad are Wipro, Ranbaxy Laboratories, Zee Telefilms, NIIT, Aptech, BPL, Hutchison Max, Dr Reddy's Laboratories, Silverline Industries, Bharti Enterprises, Morepen Laboratories, Indiatimes.com, Indiainfo.com and PentaMedia Graphics.

What about the current Sensex blues?

Technology stocks dictate as much as 40 per cent of the Sensex movement. The Sensex moves with technology. A year ago, it was the old economy stocks that were performing well. But now it is technology stocks.

Despite this short-term flu, India will have its own story to tell as far as its tech stocks are concerned.

What about the old economy stocks? What kind of investor-interest are they generating?

There is no appetite for the old economy stocks right now. Hence, I expect it will be new economy stocks that will continue to see a rise in demand from the US investors.

With over 48 per cent of the US investor community being involved in trading technology stocks, and NASDAQ witnessing a large volume of trade, it is the ideal choice for Indian companies. Besides, it is really a very simple process.

The combined market value of the 5,000 companies listed on NASDAQ was $ 5.2 trillion at the end of 1999, a rise of over 100 per cent from year-end figures for1998. The market has a larger dollar volume and trades more shares per day than any other market in the US.

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