Taiwan Bourse Expects at Least 50 China, Overseas Listings, Chairman Says
Schive Chi, chairman of the Taiwan Stock Exchange
Maurice Tsai/Bloomberg
Schive Chi, chairman of the Taiwan Stock Exchange.
Schive Chi, chairman of the Taiwan Stock Exchange. Photographer: Maurice Tsai/Bloomberg
The Taiwan Stock Exchange expects more than 50 new listings this year as the island courts investment to capitalize on improved relations with China.
As many as seven foreign companies will have initial public offerings with primary listings, in addition to “25 or 26” IPOs by domestic companies and 20 overseas companies that are set to sell Taiwan depositary receipts, or TDRs, Taiwan Stock Exchange Chairman Schive Chi said in Taipei. Fifteen companies from Campbell, California-based Integrated Memory Logic Ltd. to Taipei-based Pegatron Corp. have listed so far this year.
Yangzijiang Shipbuilding Holdings Ltd. jumped by the limit yesterday on becoming the first China-owned company to list in Taiwan. The debut paves the way for more Chinese companies to trade on the island’s exchange, boosting Taiwan President Ma Ying-jeou’s two-year drive to strengthen commercial ties with the island’s biggest trading partner and investment destination.
“This is just the beginning of a series of Chinese companies to come in,” Schive said in an interview with Bloomberg Television yesterday. “There is a potential for the Taiwan Stock Exchange to welcome the presence of red-chip companies by the end of this year,” he said, referring to Chinese companies that are registered overseas and traded in Hong Kong.
The bourse is encouraging companies with so-called H shares, or mainland companies that are traded in Hong Kong, to issue TDRs in Taiwan before seeking dual listings of exchange-traded funds between Shanghai and Taiwan, Schive said. The ultimate goal is for dual listings of Taiwan and China companies.
‘Energize’
Taiwan’s new listings will “energize” the stock market and draw more capital as technology-led gains falter, according to Peter Kurz, head of Taiwan research at Citigroup Inc. Further listings by mainland companies will boost what has been a “very quiet capital market” for most of the past decade, Kurz, who was ranked first for Taiwan research for the past three years by Institutional Investor, said in a Bloomberg Television interview.
TDRs of Yangzijiang, whose primary listing is in Singapore, surged 6.9 percent to NT$20.10 at the close from initial offering price of NT$18.80. Nine domestic companies have had IPOs so far this year, one foreign company has acquired a primary listing and five have sold TDRs, according to exchange data.
The bourse’s attractions include “attractive” price-to- earnings ratios, “high” dividend payments, “active” turnover, closer ties across the Taiwan Strait and integrated industry supply chains, Schive said.
In 2009, 93.9 percent of companies on the bourse paid dividends, higher than the 86.8 percent in Hong Kong, 51.8 percent in Shanghai and 26.4 percent in South Korea, Schive said.
‘Golden Decade’
China and Taiwan, ruled separately for six decades after a civil war, signed an Economic Cooperation Framework Agreement in June aimed at boosting trade ties between the two. The deal is a “milestone” for Taiwan, Kurz said on Aug. 19, while CLSA Asia- Pacific Markets said Taiwan stocks are poised for a “golden decade” following the agreement.
The accord “will forge closer financial ties across the strait and create a friendly climate benefiting the Taiwan market,” Schive said.
To contact the reporter on this story: Adela Lin in Taipei at alin95@bloomberg.net
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