TSEC Encourages Taiwanese Firms in Malaysia to Raise Funds at Home

Taipei, May 20, 2008 (CENS)--At a media roundtable meeting recently held in Kuala Lumpur of Malaysia, Taiwan Stock Exchange Corporation (TSEC) deliberated a detailed plan to attract overseas Taiwanese companies to raise funds in Taiwan.

"Taiwan is an ideal place for overseas Taiwanese companies to raise funds. Malaysia-based Taiwanese companies could consider listing in Taiwan's bourse, which will bring about mutual benefits for either Malaysia and Taiwan," said TSEC chairman Wu Rong-I.

According to statistics compiled by the TSEC, Taiwan is now the third-largest foreign investor in Malaysia, where Chinese is widely spoken. Most of the investments launched by Taiwanese companies in Malaysia come from the sectors of electronics and electrical, wood processing, food processing and textile. Some domestic outstanding listed companies, including Acer Inc., Chunghwa Picture Tube Co., China Steel Corporation and BenQ Corp., are well-known investors there. As of December 2007, Taiwanese companies have invested US$9.87 billion of 2,218 projects in Malaysia. In addition to creating employment opportunities, these companies have also transferred their technological know-how through the establishment of joint ventures with Malaysian partners.

"Successful fund raising in Taiwan can help companies expand their operations in Malaysia, where they will enjoy the advantages of abundance of skilled labor and natural resources," Wu explained. "On the other hand, Taiwan's capital market will benefit from a pipeline of new listings, giving investors the opportunities to capture the returns of successful overseas Taiwanese businesses."

The TSEC noted the average price-to-earnings (P/E) ratio in Taiwan currently stands at 15.4X, which is relatively high in Southeast Asia. The turnover of the Taiwan Stock Exchange was 178% last year, two times more than that of Hong Kong at 75%. Trading volume of the Taiwan Stock Exchange in 2007 stood at as high as US$1.28 trillion. High liquidity in Taiwan gives listed firms the opportunities to raise capital through successful offerings in the secondary market.

Thanks to the outstanding performance of many industries in Taiwan, many foreign investors have expressed strong interest to invest in Taiwan bourse. As of the end of December 2007, foreign shareholding accounted for 33.2% of total shareholding, and foreign investors commanded 19.7% of total trading. The exposure to international investors not only helps diversify the company's shareholding structure, but also helps a company build its reputation internationally.