Bourse. Boerse. Torihiki-jo. Exchange

Around the globe, there are many words for stock market, and nowadays almost every country – from Russia to South Africa, from Bhutan to Albania, from Egypt to New Zealand, 150-plus in all – has one of its own. A few countries like the U.S. and Japan have more than one.

But maybe not for long. Several centuries after the first stock market was established in Antwerp, Belgium, in 1531, stock markets that once pointed with patriotic pride to their independence are scrambling to align with each other.

“Ultimately, a stock exchange is a screen, and the screen these days can be located anywhere in the world,” said Daniel Hodson, who headed the London International Financial Futures and Options Exchange during the late 1990s and now is a university lecturer. “The days in which national exchanges or city exchanges are icons are over.”

Fear of Falling Behind.

Driving this consolidation is the growing speed and power of telecommunications links, and big and small investors’ keen interest in stocks from all parts of the Earth - the same forces that caused the burgeoning of online trading and pushed big U.S. securities firms to expand their business overseas.

Thus, if the national exchanges don’t take the initiative, they could be bypassed by new high-tech trading systems, such as the so called electronic communications networks, or ECNs, and others with often superior technology.

It’s hard to say for sure who will be the winner – or winners. Because the New York Stock Exchange and the Nasdaq Stock Market in the U.S. are the world’s two biggest markets, measured in market value, and the U.S. is the world’s biggest economy, both almost certainly could be major players. But they risk seeing their leadership erode.

They could lose business to nimbler overseas players, particularly in Europe, whose exchanges have moved more quickly to embrace new technology.

Hence the recent flurry of activity. Several smaller exchanges in Europe have come together. Markets in Paris, Amsterdam and Brussels are forming Euronext, while a group of Scandinavian markets have agreed to form Norex. Those deals have prompted the London Stock Exchange and Frankfurt’s Deutsche Boerse, which had long beentalking about a merger, to get their act together and announce plans to merge into a new market called iX.

Trade Locally, Think Globally

True, most people agree there still needs to be a central place for buyers and sellers of stock to come together. But in the Information Age, who says that central place has to be in anyone town or country? Investors aren’t limiting themselves by geography when selecting which stocks to buy. If they don’t see any difference between shares in companies based in Houston vs. those based in Hong Kong, why should the exchanges?

Others aren’t willing to go quite that far, but agree that national lines will blur.

In the future, “I believe that at any point in time there will be one dominant (trading) pool per instrument that might not be on national lines,” said Doug Atkin, president and chief executive of Instinet.

Regulation is also an issue. There’s the question of how long a global evolution will take given steep differences in how stock trading is policed among countries. These gaps could hinder some stocks from trading freely in the U.S., home of the world’s largest pool of money, and elsewhere.A foreign company’s shares can’t trade in the U.S. unless they are registered with the Securities and Exchange Commission and the company meets the U.S. accounting standards. “Accounting is probably the toughest nut to crack because it goes to national company law, and national company law is about as intimate and personal a national characteristic as you can get,” said Fields Wicker-Miurin, who focuses on financial markets issues for Vesta Capital, a London venture-capital and incubator firm.

In the meantime, cross-border trading, even within the euro currency zone, remains considerably costlier than home-market trades. It’s also uncertain how much all these changes will really benefit small investors in the U.S. and elsewhere.

Following the Sun

What might a global stock market look like? Frank Zarb, chairman of Nasdaq’s parent, the National Association of Securities Dealers, envisions a network of electronic markets free to trade stock issues listed on all of them through what will be one stock exchange that ”follows the sun”.

“Companies will be able to raise capital in other parts of the globe, and investors will be able to trade anywhere in the world,” he said.

Though the NYSE chairman said he recognizes that stock trading is “a global business” and that “the core 1,000 global companies will trade in multiple arenas,” his talks with foreign markets will likely lead to alliances that trade only stocks already listed both on the NYSE and on a foreign market. This would avoid the registration problem The Big Board continues to attract big multinational stocks.

Mr. Clark of First Boston, who predicts the number of world stock markets will dwindle to three or four, said that large stocks might one day carry only “minimal” commissions and may even trade free.

Gavin Casey, who will step down as chief executive of the London exchange after its merger with the Deutsche Boerse, sees nothing to stop the consolidation wave in Europe, both in trade processing and in trading platforms. But investors might not recognize the revolution right away.

Still, Mr.Casey added, “It’s moving that way, and we needed to put down our markers early.”

The Wall Street Journal Europe

Notes

1. existential angst – existential anxiety - тревога, связанная с жизнью, существованием. “Anxiety is existential in …that it belongs to existence as such and not to an abnormal state of mind.” (Paul Tillich, 1886-1965, German-born American theologian and educator)

2. icon - символ ; зд. нечто глубоко почитаемое

3. New York Stock Exchange (the Big Board, NYSE) – Нью-Йоркская фондовая

биржа

4. Securities and Exchange Commission (SEC) – Комиссия по ценным бумагам и биржам, осуществляет надзор за выполнением федеральных законов о торговле ценными бумагами

` Vocabulary

to issue – выпускать, эмитировать (деньги, ценные бумаги); stock issue – выпуск акций

securities – ценные бумаги

trader – “трейдер”: любое лицо, которое торгует финансовыми инструментами, товарами или услугами за счет клиента или свой счет; может быть брокером, дилером, спекулянтом, принципалом; broker – брокер: посредник в операциях с ценными бумагами, валютами, товарами; заключает сделку за счет клиента; dealer– дилер: компания или физическое лицо, которые оперируют на бирже (рынке) за собственный счет; speculator – спекулянт: трейдер, совершающий куплю-продажу с целью получения прибыли от изменения цен

trading – торговля ценными бумагами и другими финансовыми инструментами ради прибыли; online trading – операции клиентов с помощью электронных терминалов или через Интернет; high-tech trading systems – высокотехнологичные системы торговли; trading desk (dealing desk) - отделение на бирже (рынке, в банке), где совершаются сделки по купле-продаже финансовых инструментов; cross-border trading – международные сделки по купле-продаже

player– участник рынка

to raise capital –привлечь, мобилизовать капитал

Exercises

1. Explain or paraphrase the following:

investors aren’t limiting themselves by geography; national lines will blur; accounting is probably the toughest nut to crack; one stock exchange that follows the sun; he will step down as chief executive of the London exchange; we needed to put down our markers early.

2. Fill in the blanks with suitable words:

1. The profit and loss ------- is where the results are.
2. A company goes out of ------- when it ceases trading.
3. US companies can’t raise capital in Japan unless they are ------- on the Tokyo Stock Exchange.
4. With our recent investment, we have -------capacity and have recruited new sales staff.
5. -------, ------ , and ------- buy and sell on behalf of investors.
6. Rivals are -------.
7. People and institutions involved in a financial market are ------- -------.
8. The Big Board is another name for -----------------------.
9. A public service, such as gas, electricity, water or transportation is called -------.
10. ------- as a noun usually means agricultural products.
11. When talking about the sector of the economy that makes things we mean -------.
12. Workers collectively are called -------.

If you can’t beat’em, join ‘em