Yangzijiang Rises in Debut of First China Company to Sell Shares in Taiwan
Yangzijiang Shipbuilding Jumps Daily Limit in Taiwan
Maurice Tsai/Bloomberg
Ren Yuanlin, chairman, chief executive officer and co-founder of Yangzijiang Shipbuilding Holdings Ltd., center left, and Schive Chi, chairman of Taiwan Stock Exchange Corp. center right, hit traditional Chinese drums as part of a listing ceremony at the bourse's headquarters in Taipei.
Ren Yuanlin, chairman, chief executive officer and co-founder of Yangzijiang Shipbuilding Holdings Ltd., center left, and Schive Chi, chairman of Taiwan Stock Exchange Corp. center right, hit traditional Chinese drums as part of a listing ceremony at the bourse's headquarters in Taipei. Photographer: Maurice Tsai/Bloomberg
Sept. 8 (Bloomberg) -- Peter Kurz, head of Taiwan research at Citigroup Inc., talks about the prospects for new listings of overseas and Taiwanese companies on the island. Yangzijiang Shipbuilding Holdings Ltd., the first Chinese-owned company to sell shares in Taiwan, rose on the first day of trading for its depositary receipts on the island’s stock exchange. Kurz speaks with Rishaad Salamat on Bloomberg Television. (Source: Bloomberg)
Yangzijiang Shipbuilding Holdings Ltd. jumped by the daily maximum after becoming the first China- owned company to list in Taiwan, underscoring investor demand as the two economies seek closer ties.
The shipbuilder’s Taiwan depositary receipts rose 6.9 percent to close at NT$20.10 from the initial public offering price of NT$18.80, which was the top of a range marketed to investors. The benchmark Taiex Index slid 0.4 percent.
“Yangzijiang benefits from the novelty of being the first Chinese company to sell TDRs,” said Nicholas Yeo, who helps to manage $50 billion in Asia Pacific excluding Japan at Aberdeen Asset Management. “There are investors who are interested in the Chinese theme as cross-strait relations warmed.”
The listing paves the way for more Chinese companies to trade on the island’s exchange and is a boost for Taiwan President Ma Ying-jeou’s two-year drive to build links with mainland China. Tensions have eased since Ma took office in May 2008 and dropped the pro-independence stance of his predecessor, with the two sides signing a trade agreement on June 29.
China’s fourth-biggest shipbuilder sold 240 million Taiwan depositary receipts, the company said in a Singapore stock exchange filing on Sept. 1. Each receipt represents 0.5 share of the company in Singapore, where it has a primary listing. Of the receipts, 200 million represent new shares, while the rest were sold by existing investors.
‘Ripple Effect’
A successful listing by Yangzijiang will have “a strong ripple effect and help attract more companies to sell TDRs in Taiwan,” Schive Chi, chairman of the Taiwan Stock Exchange said in an interview with Bloomberg Television today.
Yangzijiang is in talks to buy shipyards after an industrywide slump in orders last year damped prices, Zhang Yao, head of the company’s board of directors’ office, said Aug. 23, without naming any targets. The company in June bought control of Jiangsu Changbo Shipyard Co. as the end of the global recession prompted shipping lines to start buying new vessels.
China has also encouraged consolidation in the shipbuilding industry to reduce excess capacity after orders slumped 55 percent last year, according to government figures.
China and Taiwan signed a trade agreement on June 29 that Ma called a “vitamin” for the island as both sides agreed to reduce tariffs on exports. The Taiwan Stock Exchange increased efforts to boost secondary listings and last year attracted Tingyi (Cayman Islands) Holding Corp. and Want Want China Holdings Ltd., among the biggest makers of food products that operate on the mainland. Both are majority-owned by Taiwanese investors.
China regards Taiwan as part of its territory and has threatened to invade if the island declares formal independence. The two sides have been ruled separately since Chiang Kai-shek’s Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong’s Communists in 1949.
To contact the reporter on this story: Weiyi Lim in Taipei at Wlim26@bloomberg.net
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