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June 30, 2000

U.S. Market Makers Are Going Global

By Sanford Wexler

One sign that globalization is more than a buzzword: U.S. market makers are planning to ratchet up the number of foreign stocks they trade, according to a poll by Traders Magazine.

Knight Securities expects to expand its foreign roster from 400 to 1,200 while its smaller Jersey City neighbor, Hill Thompson Magid projects an increase from 200 to 300. The results were carried in the most recent market makers survey conducted by this magazine.

Herzog Heine Geduld, which plans to increase its non-U.S. stocks from 1,000 to 1,500, maintains that U.S. retail and institutional investors see growth propelled by solid economic fundamentals in many overseas economies.

The recent performance in some foreign markets is obviously motivating market makers.

"This year an extraordinary amount of U.S. money has gone into foreign mutual funds," said Brian Gendreau, an emerging-markets analyst for Salomon Smith Barney.

The alliances among stocks exchanges across the globe is another factor. "The world no longer ignores markets or securities anywhere," said E. E. "Buzzy" Geduld, president of Herzog, Heine Geduld.

Knight Securities is constructing a 350-seat trading floor in London. Scott Littman, co-head of the trading desk at Knight, said his firm's expansion efforts are keeping pace with the "24-by-7 global marketplace," referring to the popular coinage for trading around the clock, seven days a week.

U.S. Market Makers in Foreign Stocks

Current No. Projected No.

Adams Harkness & Hill 3 5

C.E. Unterberg 0 5

Fleet Trading 100 100

Herzog Heine Geduld 1100 1500

Hill Thompson Magid 200 300

Knight Securities 400 1200

NDB Capital Markets 40 40

Spear, Leeds, & Kellog 650 750

Weeden & Co. 15 25

Source: Traders Magazine