Markets

Taiwan bourse gears up for more than 50 listings

By Adela Lin and Rishaad Salamat (China Daily)
Updated: 2010-09-10 10:57

TAIPEI - The Taiwan Stock Exchange expects more than 50 new listings this year as the island courts investment to capitalize on improved relations with the mainland.

As many as seven overseas companies will have initial public offerings (IPOs) 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 (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 on Wednesday on becoming the first mainland-owned company to list in Taiwan. The debut paves the way for more mainland companies to trade on the island's exchange, boosting Taiwan leader 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 mainland companies to come in," Schive said. "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 mainland companies that are registered overseas and traded in Hong Kong.

The bourse is encouraging companies with 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 mainland companies.

China moves up global ladder Related readings:  Mainland Yangzijiang to sell shares in Taiwan  Shipbuilder shares up on Taipei debut

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, said Kurz, who was ranked first for Taiwan research for the past three years by Institutional Investor.

TDRs of Yangzijiang, whose primary listing is in Singapore, surged 6.9 percent to NT$20.10 (63 US cents) 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.

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