Posted on Wed, Mar. 26, 2008
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Non-U.S. Company Delistings From NYSE Soared in 2007
By Committee on Capital Markets Regulation
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WASHINGTON, March 26 --
For each delisting company, the Committee determined its Tobin's Q as well as the average Tobin's Qs of companies from the same home country in the same economic sector that had not listed in the U.S. ("the compatriot set"). Finally, for each delisting company, the Committee looked at the ratio of itsTobin's Q to the Tobin's Q of the compatriot set -- a rough measure of the U.S. listing premium enjoyed by the delisting company. The Committee found:
-- Of the 40 companies for which a compatriot set could be identified, the
average U.S. premium of the delisting company was 17%.
-- For the 3 delisting companies from emerging markets, the average U.S.
listing premium was 38%.
-- For the 37 delisting companies from developed markets, the average U.S.
listing premium was 15%.Prof. Scott said, "One economic study has contended that U.S. listing premiums evidence the competitiveness of the U.S. public equity market. However, the fact that foreign companies enjoying listing premiums are leaving the U.S. suggests that listing premiums do not ensure competitiveness. We suspect the reason so many foreign companies with listing premiums are delisting is litigation and a poor regulatory process which are significant enough factors to countervail the benefit from listing premiums."
CCMR is a non-partisan committee of independent U.S. business, financial, investor and corporate governance, legal, accounting and academic leaders. It was formed in the fall of 2006 to study and report on ways to enhance the competitiveness of the U.S. capital markets.
SOURCE Committee on Capital Markets Regulation
Prof. Hal S. Scott of Harvard Law School, +1-617-495-4590; or David Dreyer of TSD Communications, Inc., +1-202-986-5051, for Committee on Capital Markets Regulation; Tim Metz, Hullin Metz & Co., +1-212-752-1044,
