or maybe it has to do with the inefficiency of the US markets. no specialists in europe, more like cme globex style trading.
traditionally, European firms borrowed money from banks and syndicates instead of floating equity on an exchange, hence the fixed income market is much bigger than the equity market. the LSE stamp duty (0.5%) only applies to paper share ownership, use of an electronic custody system like CREST can override it (or so I am informed). in the US stockbroker fees are more heavily regulated so retail equity traders get a better deal in America. weakening $ over the years (past and future) means that the Eurobond market will always have primacy over any euro based equity market.
from above "in the US stockbroker fees are more heavily regulated so retail equity traders get a better deal in America" In the US stockbroker fees are not regulated. competition has lowered fees resulting in a better deal.
from above "the LSE stamp duty (0.5%) only applies to paper share ownership, use of an electronic custody system like CREST can override it (or so I am informed)." "How SDRT and Stamp Duty are paid Most share transactions are paperless transactions, which are completed electronically through CREST. CREST automatically deducts the SDRT and sends it to HM Revenue & Customs (HMRC)." directgov.uk "or so I am informed" you should check before posting.
from above "weakening $ over the years (past and future) means that the Eurobond market will always have primacy over any euro based equity market." a dubious statement. Iam not sure that a weakening dollar in the past has anything to with the primacy of the eurobond market. as to the future tomorrow is promised to no one. the dollar may or may not weaken. in any case again it may have nothing to do with eurobond market having or not having primacy.
It's odd but actually the LSE has a higher turnover as a % of market cap than the US exchanges. LSE trading has grown massively in recent years because although only member firms do not have to pay stamp tax on purchases (0.5%) they have in turn offered contract-for-difference OTC derivatives to their clients (including the small guy). So that lots of people effectively trade directly on the order book but it is wrapped up as a CFD where the "broker" places an auto-hedge in the market for the exact amounts you trade. As for being behind the US - how many European exchanges are still open-outcry versus electronic compared to the US. Hmmmmmm... Q1
apologies, I was under the impression (from the book "liar's Poker") that in the US in the late 70s legislation was introduced which clamped down on stockbroker commissions. either way it's still not as fairly priced in Europe. a major UK bank once charged me £35 for a transaction involving less than 100 shares a couple of years ago. as for the CREST thing, I read it on wikipedia or some other encyclopaedia. as for the eurobonds market, given the tax advantage of issuing bonds in the US, there seems to be no other plausible reason to issue eurobonds other than PPP?
Is Sarbanes Oxley also playing a role? I read that meny companies are choosing other markets to go public because of that
Oh, I don't think so...following reporting regulations has always been part of the deal. Think about it this way...so what if there are other exchanges? Listing companies that are located in othe countries? How is the "system" working with these exchanges? How about the kid who was put in charge of the Iraq stock exchange...do you want to trade that market, LOl...probably not. You can trade from anywhere with today's technology...so keep that major assumption, and then choose which markets you choose to trade. We have people trading man markets, but still over 90% U.S. markets. If there was an edge somewhere else, then we would trade there...but while "others" have the edge in other marketplace, we choose to trade primarily here. FWIW from my perch. Don
Don- This was from another thread. Thought this might apply to this thread. Do you know of any prop. firms in U.S. that trade equities in overseas markets? Mav says yes, but his response was not specific. 09-24-06 07:33 PM Thread title: Trading FTSE DAX or Nikkei Markets from U.S. -------------------------------------------------------------------------------- Quote from mtg2: Is anyone trading these markets at a Prop. firm in the U.S.? This seems like a growth area. Also, what would be a good broker for these markets and what about margin? (i.e. Interactive Brokers) -------------------------------------------------------------------------------- Quote from Maverick74: Sure. Why wouldn't they?