Global Shops On Wall Street
IF there's any doubt that the financial and securities industries are global, take a quick trip through Manhattan. Scores of important foreign-owned institutions are here, such as Nikko Securities, from Japan, and County NatWest Bank, a subsidiary of National Westminster Bank PLC (Britain). What's equally significant is that many smaller non-United States firms are establishing a foothold here - and turning right around and using their American operations to market financial services abroad. In other words, the New York affiliate itself becomes a major financial-services supplier for Europe, Latin America, Africa, or Asia.
Case in point: Transvik Inc., a New York firm that's actually Swedish-owned. Transvik, set up in 1987, has developed a new trading-system technology with the potential to dramatically speed up the execution of buy and sell orders.
Transvik is an affiliate of Kinnevik, a Swedish information and communications conglomerate. It developed the new technology here in the US. The trading system is portable and totally-electronic. Using Digital Equipment Corporation VAX minicomputers, the Transvik system provides almost immediate matching and settlement of stock trades, says Bjorn Wissen, Transvik's president.
The system is currently used for the Nordex Market, a cross-border trading system operated by a sister affiliate of Transvik. The Nordex Market began in late November 1990 out of London, and competes with London's Seaq International, a system involving mainly institutional trading. The Transvik system is different from most existing trading systems, such as NASDAQ's system that confirms trades and other market information. Rather, the Transvik process actually executes trades, using a personal computer- style "mouse," rather than a computer keyboard. The Nordex Market, Mr. Wissen says, hooks up brokers in Sweden, Norway, London, Luxembourg, and New York. Currently, some 20 major Swedish and Norwegian companies are listed on the system.
Next on Transvik's agenda: Leningrad, in the Soviet Union. In early January, Transvik and the Peake/Ryerson Consulting Group signed a letter of intent with that city to form a joint venture to establish and operate a new Leningrad Stock Exchange and a Leningrad Commodities Exchange.
Wissen concedes the difficulty of getting free-trading markets under way in Leningrad. There's the need for legal and accounting standards, as well as transcending internal Soviet politics. But, he says that he is "taking a humble attitude" about going forward with the system, which he says might actually be in operation in the next year or so. Transvik is not alone in seeking to introduce modern market systems to the Soviet Union. Last October the New York Stock Exchange signed an agreement with the So viet Union to aid Moscow in developing its market systems. Transvik, not surprisingly, likes to note that the Big Board system - unlike its own trading system - is not totally electronic: Rather, NYSE orders are matched and executed manually.
Another new company that has established itself here and is now thinking globally is a subsidiary of the 150-year-old Francois-Charles Oberthur Group, a French security engraver.
The US affiliate is Banknote Corporation of America. It was set up in April 1990 at the urging of the antitrust division of the US Justice Department, which wanted more competition in the US securities engraving market. That industry was then undergoing intense consolidation. The French affiliate is now an important competitor to the dominant US security-printing firm, the United States Banknote Corporation.
Security printers make engraved securities documents such as stocks and bonds, travelers checks, car titles, and banknotes.
Banknote Corporation of America now commands 7 percent of the $120 million security printing-market, says Martin Ferenczi, company president. Annualized sales, he says, "are about $10 million and we're expecting to reach $30 million in a few years." He is now setting up an international sales office here.