Individual Chinese to be able to invest locally


By John Liu, The China Post

TAIPEI, Taiwan — The local stock market will be opened up to Chinese individual investors as early as the third quarter, the Financial Supervisory Commission (FSC) announced yesterday. The FSC plans to put forward regulations covering the practice by the end of June. The commission will decide if it will place a cap on the amount (or proportion) of Chinese investment allowed in the local stock market. In addition, it will determine how to prevent illegal money laundering and how to safeguard consumer interest, among other things.

However, the ultimate goal is to ease the process of opening new accounts in Taiwan for Chinese investors. Mainlanders will be allowed to travel to Taiwan and open securities accounts, according to FSC Chairman Tseng Ming-chung (���ʩv). The global stock market trend has become very clear, Tseng said, adding that many local individual investors have gone abroad to buy stocks. ��Instead of just letting out domestic investors, we hope to attract new foreign investors as well,�� Tseng said, adding that the FSC’s new measures aim to attract big investors in Greater China. Under the current legal framework, Chinese may manage their finances in Taiwan through offshore banking units. However, they may not open securities accounts on the island through offshore securities units. The FSC plans to change this. Local Investors Rave about the New Measure The FSC’s policy is widely considered a positive for Taiwan’s stock market. It will increase local stocks’ visibility on the global stage, infuse liquidity into Taiwan’s stock market, with a chance of boosting price-earnings ratio of local stocks. There has been little trading volume in Taiwan’s market, and it should be opened up to the whole world, said security analyst Chen Zhong-rui (������). Liu Kun-hsi (�B�[��), general manager of Masterlink Securities Investment Advisory Corp. (���I���U), expects the opening up will attract investors.

Chinese individual investors have a lot of capital, and Taiwan’s technology and electronics sector is attractive to them, Liu said. Kevin Lin (�L����), vice president of Caizischool Co., suggested that the government step up its promotion efforts to Chinese investors. The government can emphasize the benefits of investing in local stocks. It may consider compiling a stock index tailored specifically for Chinese investors, Lin said. Lee Chin-tu (�����g), a famed independent investor in Taiwan, expressed his full support for the FSC’s new measure yesterday. The government should implement the policy as soon as possible, he said. Lee termed the measure as ��Taiwan-mainland China connect,�� a counter measure to the recently launched Shanghai-Hong Kong Stock Connect, a platform that allows investors in the respective markets to trade and settle shares listed on the other market.