Your Market of Choice

1
Your Market of Choice
ADD PHOTOS HERE
June 2006
2
The New New York Stock Exchange
3
I Global Overview
4
Global Market of Choice
The NYSE is the world's largest and most global
equity market
and is home to approximately 8.8
trillion of non-U.S. companies
The worlds largest stock market has a market cap
of 23 trillion
MARKET CAPITALIZATION (in USD Trillions)
Domestic NYSE
Non-U.S. NYSE
Market Capitalization nearly doubled in last 6
years despite recent market downturn
Euronext consists of Paris, Brussels, Lisbon and
Amsterdam. Regional Percentages segmented by
Global Market Capitalization. Source World
Federation of Exchanges NYSE Research
Exchanges Data as of January 2006
5
Global Market of Choice

• Lower Cost of Capital
• Best Price
• Tightest Quoted Spreads
• Deepest Liquidity
• Access to Information
• Specialist Accountability
• Unique Investor Relations Tools
• Visibility/Brand Association
• Unique Global Networking
• Multi-media advertising
• Maximize investor and customer reach

2005 Fortune 500 422 (84) are NYSE listed
2005 Fortune Top 10 Globally Admired Brands 7
of 10 are NYSE listed 2005 Fortune 100 Fastest
Growing Companies 41 are NYSE listed 2005
Business Week 50 Best Performing Companies 36
of 50 are NYSE listed 2005 Barron's 500 91
are NYSE listed Dow Jones Industrial Average
28 of 30, or 93 are NYSE listed SP 500 424
(85) are NYSE listed Governance Metrics
International 100 are NYSE listed
The Worlds Premier Brands
NYSE Benefits
The Company You Keep
6
Global Market of Choice
Over the past five years, the NYSE has
consistently attracted an average of 90 of
qualified IPO proceeds.
2001-2005 Market Venue for Qualified IPOs ()
NYSE Dollars Raised
Nasdaq Dollars Raised
Reflects domestic qualified IPO activity. Source
NYSE Data, ILX and Commscan Equidesk, excludes
closed-end funds.
7
The Market of Choice
The New York Stock Exchange is home to a
diverse community of companies
representing a range of trading volume and market
value categories.
SEGMENTED BY MARKET CAPITALIZATION
SEGMENTED BY AVERAGE DAILY VOLUME
For NYSE domestic and international companies
(excluding funds, derivatives and preferred
stock). For the purpose of this analysis large
cap greater than 5B, mid cap 1B to 5B, small
cap lt1B. Period As of December 31,
2005 Source Standard Poors Research Insight
8
II Superior Market Quality
9
Superior Market Quality Lower Cost of Capital
Significant Decline in Intraday Volatility

• SEC sponsored study evaluated volatility of 91
  Nasdaq transfers to NYSE, April 2001 to January
  2004
• Transitory volatility, obscuring fundamental
  value, is materially higher on Nasdaq

Five Minute Intraday Volatility (bps)
Average Price Change for Period of Study Nasdaq
Pre 35 bps NYSE Post 17 bps

• Volatility declined 52 following transfer from
  Nasdaq to NYSE
• Seventy-eight, five minute, intra-day trading
  intervals
• 60 days pre/post transfer from dealer market
• 51 Nasdaq companies transferred

930am-10am Nasdaq Pre Average 65 bps vs. NYSE
Post Average 28 bps
330pm-4pm Nasdaq Pre Average 48 bps vs. NYSE
Post Average 22 bps
Source SEC Office of Economic Analysis,
Analysis of Volatility for Stocks Switching from
Nasdaq to NYSE, December 15, 2004.
Source NYSE Execution Quality in 2003-2004.
Authors Paul Bennet Li Wei, published April
2004.
Lower Execution Costs
Lower Discounts For Secondary Offerings

• Secondary offering of 1.1B or 60MM shares,
  representing approx. 50 of public float
• Price discount of 0.18, or less than 1, versus
  prior day close
• Consistent trading pattern during the trading
  day, with 2.1 volatility versus 4.0 historically

An independent academic study covering 5,505
secondary offerings by Loughran indicates an
average discount for NYSE offerings of 2.0 vs.
4.1 for the Nasdaq. After adjusting for
asymmetries in deal risk profile, a 153 basis
point advantage still exists for NYSE.
CASE STUDY
Abel/Noser Corp. Q3 2002 - Q2 2003 Elkins/McSherry
Global Universe Q3 2003 Q2 2004 Plexus Group
Q1 2003 Q3 2004
10
Market Quality- Case Study
Trading on NYSE creates lower execution costs for
investors and provides lower volatilities
(Comparing Suntech Vs China Medical (CMED))
Intraday Price Volatility (in)
Volume-Weighted Effective Spreads (in bps)
Volatility is a measure of how much a particular
security rises or falls in a short period of
time. In general, low volatility is indicative
of an orderly, liquid market for a companys
stock.
Effective Spreads are a measure of execution
costs for investors. Lower the spreads, lower the
trade execution costs
Volume-weighted effective spreads as percentage
of price, expressed in basis points, Intraday
price volatility average of (daily high-daily
low) / daily high. For the period February
2006 Source NYSE MaQS Database
11
Cost Efficient Trading
A study conducted by Elkins/McSherry comparing
institutional execution costs found that the New
York Stock Exchange was one of the lowest cost
market venues worldwide and 25 more cost
efficient than Nasdaq.
Source Elkins/McSherry study published in
November 2004 Institutional Investor magazine of
institutional trading costs from July 2003 to
June 2004. 10 largest equity markets ranked by
market capitalization as of September 2004 as per
FIBV data. All numbers represented in basis
points.
12
Positive Impact on Institutional Ownership

Institutional ownership increases following
transfer to the NYSE.
US Institutional Ownership Pre/Post NYSE Transfer

• 
  
• Companies transferring from the Nasdaq to NYSE
  have experienced
• 28 increase in the number of
• institutional owners
• 13 increase in shares owned
• by institutions
  
  
  
  
  

Number of Nasdaq Institutional Shareholders
Source Thomson Financial, August 2005


Study
examines the long-term effects of a NYSE transfer
on institutional ownership. Twenty-seven
companies transferred from Nasdaq between January
2003 and July 2005 fourteen companies with
complete data were included.
13
Market Structure Impacts Trading Quality
Nasdaq
NYSE
Fragmented markets inhibit direct competition
among orders. Price dislocation and volatility
are especially evident during the markets
opening and closing resulting in higher trading
costs.
Reliable Pricing
A single pricing mechanism aggregates the
interest of all buyers and sellers and accurately
reflects true supply and demand in the market.
This model is essential during periods of market
stress and the close of trading. Centrality of
order flow results in lower volatility, higher
fill rates, lower cost of capital and investor
confidence.
80 market share and provision of liquidity by
specialists result in fill rates of 79, the
highest in the U.S. capital markets
Lack of dealer accountability and market
fragmentation results in sub-standard fill rates
of 43.
Certainty of Execution
NYSE rules require the specialist to commit
capital to satisfy investor demand in the absence
of natural buyers and sellers.
Accountability
Dealers have no regulatory requirements to
provide a continuous market in a stock.
Investor Protection
Human judgment of the specialist supported by a
technology based surveillance program quickly
identifies aberrant trading activity. Uniform
dissemination of information to all market
participants enables investors to make informed
trading decisions.
Decentralized, fully electronic markets lack the
regulatory structure to protect investors,
especially during extraordinary events when the
market is under stress.
Customer-centric, hybrid model offers choice
fully automated transactions for commodity orders
or human interaction to facilitate large, complex
trades.
Single-focused, electronic platform limits the
markets flexibility to accommodate orders with
unique trading requirements.
Choice of ExecutionPlatform
14
III Global Positioning Support
15
Strategic Initiatives for Enhancing Visibility
Showcasing Our Listing Company
NYSE staff will meet with the listing company to
craft an integrated Marketing Communications
program that best suits the issuers needs.
Bell Ceremony
Shareholders, Institutional and Individual
Investors
Media Visibility
NYSE Editorial
Customers
Online Resources
Employees and Management
Customer Events
International and Local Media
Employee Program
16
IV NYSE Arca
17
Background

• An alternative venue for domestic and non-U.S
  companies
• Trades over 700 million shares each day globally
• On April 27, traded a record of 1.1 billion
  shares valuing 39.8 billion.

18
NYSE Arca - Listing
Procedure

• Companies choose Lead Market maker to
  maintain depth and quality of trading
• Lead Market maker has the responsibility
  for keeping tight spreads in the stock
• NYSE Arca-listed companies are able to
  graduate to full NYSE listing

19
Market and visibility Benefits

• Darwins at NYSE Arca
• Full page Wall Street Journal advertisement
  featuring Darwin
• Darwin executives rang NYSE Bell
• CEO Stephan Sills interview highlighted
  on nyse.com
• Darwin is very impressed with NYSE Arcas
  ability to meet the needs of our company and our
  shareholders.
• We are particularly pleased to be the first
  listing since the merger of the NYSE and Arca,
  and anticipate a great relationship going
  forward. Stephen Sill, CEO Darwin professional
  Underwriters
• Suite of highly customized services enhance
  Darwins investor relations efforts

20
Quality Listing Standards
CRITERIA
REQUIREMENTS
WORLDWIDE DOMESTIC
_
_
21
Quality-Oriented Listing Standards
NYSE Arcas proposed listing standards complement
the NYSEs current focus on quality companies.
NYSE Group Listings Standards
NYSE Listing Standards
NYSE Arca Listing Standards

• Adjusted Pretax Earnings
• Valuation with Adjusted Cash Flow
• Valuation with Revenue
• Affiliated Company

• Minimum Market Capitalization
• 100MM and two of the following
• (IPOs 45MM minimum offering)
• Total Assets ? 75MM
• Annual Sales ? 50MM
• - Total Equity ? 50MM
• - EBITDA or Pre-tax Earnings
• Positive

Pending SEC approval.
22
V Partnership with China
23
?????????????
2003 ????????????? 2002 ???????????????????
1998 ????????????????? 1997 -??????????????????
1986 ??????John Phelan???????????????
?????????31??????????(18????????,????8?,????5?)

24
??????????????????
?????????? ?????????? ???????????? ??????????????
?? ??? ???? ????? ???? ????
??
???????????? ???????????? ?????????? ?????????? ?
??????????? ????????????? ?????????? ?????????? ??
?????????? ????
?? ???? ???? ?????? ????(??)???? EK
Chor China Motorcycle Co.,Ltd. Global-Tech
Appliances Inc. ?????? Tommy Hilfiger Co.
25
??????????????
26
NYSE Asia Pacific Team
For more information, please contact Madhu
Kannan Managing Director Global Corporate
Client Group Tel [phone] Yeeli Hua
Zheng Executive Director Asia Pacific, NYSE
Group Tel [phone] Email
yzheng_at_nyse.com