Taipei-The Taiwan Stock Exchange (TWSE) said Wednesday that it is encouraging small and medium-sized enterprises based in the United States to raise funds in Taiwan by listing on the local equity market.
The TWSE, which operates the local main board, said it held a conference in Los Angeles on Monday to introduce Taiwan's capital market to U.S. firms that are interested in launching primary listings on the local main board.
TWSE Senior Vice President Chien Lih-chung (???), who chaired the conference, said the average price to earnings ratio (PE ratio), which values a listed company by measuring its current share price relative to its earnings per share, was around 16 on the local main board.
However, the average PE ratio of foreign incorporated companies listed on the main board was higher than 21, indicating that such companies were attracting more buying interest, he said. Taiwan's equity market, therefore, is good for fund raising by foreign incorporated companies, Chien said
Currently, five of the 900-plus companies listed on the main board are based in the U.S., including auto parts supplier BizLink Holding Inc., chip maker Silergy Corp., and photonic device firm CoAdna Holdings Inc., he said.
They are among the 68 foreign companies that have launched primary listings in Taiwan to raise funds, he said.
The 68 foreign companies are in sectors such as integrated circuit design, auto parts, electronics components and consumer products, which indicates that a broad composition is attractive to investors, Chien said.
By the end of the year, at least one more foreign company is expected to list its shares on the local main board, he said.
In addition to active trading, Chien said, the local equity market also boasts highly liquidity, another positive factor for listed companies seeking investments.
He said Taiwan has a sound and transparent legal system that quickly reviews applications for listing, while the country's political and economic climate is stable.
In particular, Taiwan's moderate market capitalization, which exceeds US$1 trillion and is the 18th highest worldwide, is suitable for foreign small and medium-sized firms to raise funds, Chien said.
Source: Focus Taiwan News Channel