FSC emphasizes advantages of listing

The China Post staff

Observing one Taiwan company after another applying to the Hong Kong Stock Exchange (HKSE) for listing there, Financial Supervisor Commission (FSC) member Huang Hsien-hua stressed that listing in Taiwan has several unique advantages such as active market transactions, high turnover and dynamic market liquidity.

“All the advantages make Taiwan an ideal market for companies to raise funds,” Huang noted. “For almost all Taiwan companies, Taiwan is the market they are most familiar with and that’s one of the unique advantages of the Taiwan stock market,” he continued.

To offer better incentives to attract overseas Taiwanese companies to apply for local listings, the FSC has been working on a new package for listing overseas Taiwanese companies, scheduled to be completed by the end of this year.

Though Hong Kong gathers funds coming from the international markets, Chinese mainland and Hong Kong itself, most the funds are focused on investing in Hong Kong shares. “Taiwan companies listed on the Hong Kong market do not appeal to investors there,” Huang said. In his observation, the turnover rates of HKSE-listed companies are much lower than for Hong Kong companies. “Their major shareholders account for most of their transactions there,” Huang observed.

For Taiwan companies, the Hong Kong listing provides only one chance for raising funds. That’s during the IPO (initial public offering) period. “It’s hard for them to raise other funds after the IPO,” Huang commented.

Huang recognized the restrictions of the current regulations on the local listings of overseas Taiwanese companies. “The FSC will remove or relax these restrictions in the proposed new regulations.

It’s estimated that dozens of Taiwanese companies located on the Chinese mainland have applied to the HKSE for listing during the first seven months of this year. Most of these companies are mainland-based subsidiaries of Taiwan companies which have been listed on the Taiwan Stock Exchange (TSE).