Question

In: Finance

What recent factors have made U.S. markets less attractive to foreign investors and issuers?

What recent factors have made U.S. markets less attractive to foreign investors and issuers?

Solutions

Expert Solution

We'll point each factors that's making US capital markets being less attractive an option to the foreign investors and issuers as below:

  1. American's who although own 401(K) Retirement account might have not held stock as in their investment which shows the gap in between stock value and stock reach. This shows the trust over pension funds rather than funds investing in the stocks.
  2. Largest companies choosing IPO's to be issued in different locations geographically could be a resultant as to lose the attractiveness of the US Markets.
  3. US is going through a continuous deficit in maintaining it's Current Account where this is majorly affecting the foreign investors invest their money into the US markets.
  4. Other markets in the global economy have created more competition relatively with the US market.
  5. NYSE's listing costs are significantly higher than it's competitors making other companies think about raising an IPO or raising share capital via secondary market.
  6. Cost of compliance like SOX has been increased which again is expensive when dealing for the foreign investors.

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