The Taiwan Stock Exchange is encouraging Taiwanese investors operating in China's Shandong province to launch a primary listing on the local equity market.
Teaming up with Deloitte Taiwan, the TWSE, which runs the local main board, held an investment conference in Qingdao on Aug. 17 to brief almost 30 Taiwanese investors which have set up footholds in Shandong about the local capital market.
As of the end of July, a total of 54 foreign incorporated firms had kicked off a primary listing on the TWSE and more than 80 percent of them have major operations in China, the exchange said.
So far, only Jinan Acetate Chemical Co. (??-KY), which started a primary listing in November 2015, operates a major production base in Shandong. The company sells cellulose acetate tow in China and in foreign markets, according to the TWSE.
Lee Chi-hsien (???), president of the TWSE, said that with more and more Taiwanese investors locating their operations in Shandong, they have found a growing need for them to raise funds, and have plans to sell stakes in Taiwan's equity market.
Speaking at the seminar, Lee said that the meeting aimed to allow Taiwanese firms in Shandong to have a better understanding of Taiwan's equity market by providing them with information about the market mechanism which has been designed to help Taiwanese firms operating overseas upgrade their technology through fund-raising.
The TWSE said that by taking advantage of the listing process, companies are expected to strengthen corporate governance and fulfill their social responsibilities. In turn, their image in the local market will be polished by a share listing, which could help them attract more talent and raise more funds to improve their technology.
According to the TWSE, the market has voiced concerns over the possible impact on stock listings by Taiwanese firms in China amid cooling cross-strait ties after the independence-leaning Democratic Progress Party took power on May 20. But, the exchange said that the new government is open-minded toward any listing plan by Taiwanese firms operating on the main board.
In fact several Taiwanese firms in China, such as Jiyuan Packaging Holdings Ltd. (??-KY), have been seeking a primary listing on the local main board since July, the TWSE said.
The TWSE said that the average price-to-earnings ratio of the 54 listed foreign-incorporated firms hit 20.96 percent with an average turnover ratio of 106 percent and an average dividend yield of 3.73 percent.
The exchange said investors have shown great interest in trading these foreign-incorporated companies, making the local equity market a good platform for these firms to raise funds.
Source: Focus Taiwan