Outlook: Hi-tech exchanges

AT LEAST the Stock Exchange has not lost its sense of irony. Just as the internet bubble bursts, London is to get its own new technology market. After agonising over the issue for almost a year Gavin Casey is finally about to push the button on a Nasdaq-style exchange on this side of the Atlantic. Some might feel that the decision is a decade late, not just a year, but there again the Stock Exchange has never been noted for its fleetness of foot.

While Mr Casey and the Stock Exchange bureaucracy have pondered what to do, Nasdaq has lost a fifth of its value. That does not make this the most auspicious moment to launch a rival exchange. But then again, ill- timed launches are the Exchange's stock in trade. The order driven trading system Sets was launched long before all the bugs had been ironed out and only now has the Exchange admitted that those who attempt to trade in the first hour of the day do so at their peril.

Nasdaq will be easy to copy but it will be harder to emulate, much less beat. To say Nasdaq has a first move advantage is an understatement. The US exchange is now 28 years old and lists 5,000 companies with a market capitalisation of $3 trillion. It has also projected its brand name far beyond the US so that the natural home now for any company with high-tech credentials and a yearning to list, be they in India or Israel, is New York, not London.

Indeed, the Nasdaq salesmen who tramp the sub-Continent and the Pacific endeavouring to drum up business say the chances of bumping into anyone from the LSE are remote to non-existent.

Although London succeeded in hanging onto Freeserve, which has a dual Nasdaq listing, by waiving the listing rules, there are plenty of other internet companies who have ignored London.

The Stock Exchange thinks it can tap that market. But even the Germans are ahead of us with their Neuer Market.

Further out there is a more fundamental challenge facing the Stock Exchange. Some high-tech companies may decide to by-pass all the world's physical exchanges and list in cyberspace by simply publishing their prospectus on the internet.

The London Stock Exchange does not have a reputation for being ahead of the curve. On this occasion it may have missed the turn altogether.