Nasdaq ponders Internet chat scrutiny

The Nasdaq stock market is currently looking at a system of monitoring chat room pages on the Internet in an attempt to ensure that the share prices of companies listed on the exchange are not artificially inflated on foot of rumour and hearsay.

Chat rooms are pages on the worldwide Web where investors can swap views and tips about which stocks to buy or sell in real time.

"Anything that contributes to hyped stocks we would be concerned about," said Ms Maggie Kelly, Nasdaq's vice-president of international marketing, who was in Dublin yesterday to promote the exchange.

The Nasdaq is looking at a system that would search for keywords describing stocks, such as "hot", on chat room pages. If it felt that a stock was being hyped, it would notify the company concerned about it.

There has been concern about the rapid growth in certain US shares, particularly Internet stocks, in recent months. Many of these firms have yet to show a profit yet their share prices have gone through the roof. Often they are being bought by ordinary investors rather than by industry insiders or big investors.

Ms Kelly urges private investors to do their research before investing, rather than just taking a tip from a friend or a chat room page.

The exchange, which describes itself as "the stock market for the next 100 years" is launching a marketing drive in Europe to raise its profile.

This has already begun in Britain, where the Nasdaq is running a television advertising campaign to promote awareness, and will be extended to other parts of Europe, including France, Germany and Switzerland.

At present, 11 Irish companies are listed on the Nasdaq, more than the number of French or German companies, making the Irish market an important one. Companies with a Nasdaq listing include CRH, Waterford Wedgwood, Ryanair, Iona and CBT and the exchange is hoping for some new Irish listings.

The Nasdaq, which now trades more shares on average on a daily basis than the New York Stock Exchange, joined forces last year with the American Stock Exchange to form the Nasdaq-Amex Market Group.

This represented 66 per cent of all publicly traded companies in the US by the end of last year, while 450 non-US companies were listed on it.