Government to change regulations to boost high-tech, innovative firms

The China Post news staff

Taiwan is amending its regulations to better accommodate the need to transform the island into a fund-raising platform for high-tech and innovative businesses, with particular effort going into building an appraisal standard for intangible assets, said a government official. Speaking at a forum on making Taiwan a fund-raising platform for high-tech industry as well as small and medium-sized businesses in Asia-Pacific hosted by the GreTai Securities Market, Financial Supervisory Commission (FSC) Vice Chairman Wu Tang-chieh (吳當傑) said that Taiwan’s capital market has the conditions to become a regional fund-raising center.

As of the end of October, 24 foreign businesses had listed in the Taiwan Stock Exchange (TWSE) via Taiwan depositary receipts (TDRs), 3 foreign enterprises successfully completed primary listing or primary OTC (over-the-counter) listing, 13 foreign companies have obtained Emerging Stock Market registrations while over 60 had entered into Advisory Contracts for Exchange (OTC) Listing, Wu said. Most of these companies are from the high-tech industry, he added. Taiwan has been a global powerhouse for high-tech industry. By the end of September, about half of the companies listed in the TWSE were high-tech enterprises, contributing to 54 percent of the TWSE’s total market value. High-tech enterprises also accounted for 72 percent of the OTC listed companies, occupying about 77 percent of the total value of the OTC market.

Foreign investors also hold an important place in the Taiwanese stock market. Until the end of September, the total accumulated net inward remittance of foreign funds reached US$158 billion, Wu said. Over 85 percent of the inflow of foreign capital was to investments in the stock market, occupying 31 percent of TWSE’s total market value. Foreign investors own over 50 percent of stocks of many technology companies, he said.

In order to seize on Taiwan’s strength to better internationalize the island’s capital market, the government will continue to push for regulation amendments to attract foreign investment in the Taiwanese market, including the promotion of an appraisal system for intangible assets to protect investors’ rights, he said. Wu said the government hopes to complete the necessary amendments within five years. The FSC’s plan for a “Fund-Raising Platform for Hi-Tech and Innovative Firms” was approved by the Executive Yuan on Oct. 28 and will be effective until 2013. The number of newly TWSE (including OTC) listed companies is projected to reach 330 by 2013 with the amount of raised fund expected to reach NT$268 billion in the time period of time. Yesterday’s forum was attended by senior government officials, academics and businesspersons in Taiwan as well as foreign dignities. Fok Kwong Man, the Chief Marketing Officer of the Hong Kong Exchanges and Clearing Limited response for attracting new issuers to list in Hong Kong, also participated in the event, raising speculation that the hand behind Hong Kong’s attraction of many mainland China-based issuers and the Growth Enterprise Market (known to some as the city’s NASDAQ) was in Taiwan to push for more cooperation between Hong Kong and Taiwan stock exchanges.