Listed Firms Double Capital Market Fundraising in 2010

Taiwan's listed firms will raise more than NT$160 billion (US$5 billion at NT$32:US$1)on the domestic capital market this year, double the figure for 2009 and the largest amount since the recent global financial crisis, according to an estimate by the Taiwan Stock Exchange (TWSE).

Taiwan's capital market has regained momentum in fund-raising by listed firms over the past couple of years, thanks partly to efforts by the Taiwan Stock Exchange (TWSE) to promote the listing of both domestic and overseas firms on the domestic bourse.

The TWSE explains that helping enterprises to raise fresh funds for sustained operation is one of the most crucial functions of the capital market. Since reaching a peak of NT$420 billion, however, the amount of funds raised on the domestic capital market has been dwindling. Amidst the global financial crisis, domestic listed firms raised only NT$26.9 billion in fresh funds in 2008.

After that the market gained some momentum again, and the amount of funds raised climbed to NT$85.1 billion last year. In addition to the efforts of the TWSE, the increase can be attributed to the recovery of the domestic economy and the fiscal incentives provided by the Ministry of Finance.

According to statistics compiled by the TWSE, funds raised on the domestic capital market in the first eight months of this year amounted to NT$43.4 billion, up 1.92-fold from the same period of 2009.

The TWSE predicts that firms listed on the domestic market, including new listings, will raise fresh funds totaling NT$160 billion (about US$5.1 billion) this year, doubled last year's amount.

The TWSE's tallies show that six new firms listed TDRs (Taiwan depository receipts) on the domestic bourse up to September 8, when the Yangzijing Shipbuilding Holding Co., which is Chinese-owned and listed on the Singapore Stock Exchange, launched its TDRs here. TDRs listed by the six firms raised a total of NT$8.6 billion in fresh funds. The six new TDR-listing companies are the Kith Holdings Co., Hwa Fong Thailand Co., Good Friend Holdings Co., Super Group, and Global Sweeteners Holding Limited, in addition to Yangzijiang. .

The TWSE reports that a total of 16 TDR listings have raised NT$44.7 billion on the local stock market since the beginning of 2009. Taiwan-listed firms issuing global depository receipts (GDRs) overseas during 2009 and the first eight months of 2010 raised a total of NT$102.9 billion.

In the past, Taiwan's capital market focused on localization by restricting TWSE listings to local companies, and by requiring that the funds they raised through listing should be used in Taiwan. Over the past two years, though, the Taiwan government has been pushing the internationalization of the domestic capital market and trying to attract foreign firms to list on the domestic bourse.

TWSE chairman Schive Chi says that his company is aggressively promoting primary and secondary listings by foreign and overseas Taiwanese firms, with the aim of establishing the island as an international capital market. In this way, TWSE-listed firms will be able to share their operating results with domestic and foreign investors in a directive way. Schive emphasizes that the TWSE will continue working for the diversified development of the domestic capital market. (BS, Sept. 2010)