Taipei stock index soars 6.7% on hopes of investment flows
(TAIPEI) Taiwanese shares surged yesterday after the island’s government said it will allow Chinese institutional investors to buy into its stock market.
The decision announced on Wednesday is a milestone in Taiwan’s rapidly developing economic ties with China and the first step in a wide-ranging financial cooperation programme it launched with the mainland last weekend.
Starting next week, mainland institutional investors will be able to apply to buy Taiwanese shares as long as the accumulated stock does not exceed 10 per cent of a listed firm’s total share value, the Financial Supervisory Commission said.
Taiwan’s benchmark stock index surged 6.7 per cent to 5,992.57 amid hopes that the decision will lead to investment from the Chinese mainland.
State-owned China Mobile Ltd said it agreed on Wednesday to buy 12 per cent of Taiwan’s Far EasTone Telecommunications Co for NT$17.8 billion (S$786 million), though the deal requires Taiwanese government approval. Guidelines for Chinese companies interested in buying Taiwanese companies are likely to be announced in late May or early June, and those limits could go as high as 20 per cent of share value.
The regulating agency said Taiwan will continue to relax its control on Chinese investment ‘step by step’ to eventually include futures trading.
‘We hope the move can increase the market’s dynamics and . . . foster the prosperous development of our financial services industry,’ the agency said.
On Sunday, envoys from the two sides signed a financial cooperation agreement in Nanjing, China, that paves the way for the two sides to open banks and other financial institutions in the other’s territory.
Taiwan has long banned such arrangements, fearing they would allow Beijing to gain control of its economy. But President Ma Ying-jeou has pushed aggressively for closer economic ties since he took office last May, stressing they are crucial for Taiwan’s economic integration in the region.
However, an official with Taiwan’s Investment Commission said the telecom industry will not be among the sectors immediately open to Chinese investment, casting doubt on the China Mobile deal.
Far EasTone’s chairman Douglas Hsu said the partnership will provide his firm with ‘a very strong platform to grow’ by prying into China’s vast market. Its shares closed up the daily limit of 7 per cent to NT$37.65. -- AP
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Rule change boosts Taiwan stocks
Taipei stock index soars 6.7% on hopes of investment flows
(TAIPEI) Taiwanese shares surged yesterday after the island’s government said it will allow Chinese institutional investors to buy into its stock market.
The decision announced on Wednesday is a milestone in Taiwan’s rapidly developing economic ties with China and the first step in a wide-ranging financial cooperation programme it launched with the mainland last weekend.
Starting next week, mainland institutional investors will be able to apply to buy Taiwanese shares as long as the accumulated stock does not exceed 10 per cent of a listed firm’s total share value, the Financial Supervisory Commission said.
Taiwan’s benchmark stock index surged 6.7 per cent to 5,992.57 amid hopes that the decision will lead to investment from the Chinese mainland.
State-owned China Mobile Ltd said it agreed on Wednesday to buy 12 per cent of Taiwan’s Far EasTone Telecommunications Co for NT$17.8 billion (S$786 million), though the deal requires Taiwanese government approval. Guidelines for Chinese companies interested in buying Taiwanese companies are likely to be announced in late May or early June, and those limits could go as high as 20 per cent of share value.
The regulating agency said Taiwan will continue to relax its control on Chinese investment ‘step by step’ to eventually include futures trading.
‘We hope the move can increase the market’s dynamics and . . . foster the prosperous development of our financial services industry,’ the agency said.
On Sunday, envoys from the two sides signed a financial cooperation agreement in Nanjing, China, that paves the way for the two sides to open banks and other financial institutions in the other’s territory.
Taiwan has long banned such arrangements, fearing they would allow Beijing to gain control of its economy. But President Ma Ying-jeou has pushed aggressively for closer economic ties since he took office last May, stressing they are crucial for Taiwan’s economic integration in the region.
However, an official with Taiwan’s Investment Commission said the telecom industry will not be among the sectors immediately open to Chinese investment, casting doubt on the China Mobile deal.
Far EasTone’s chairman Douglas Hsu said the partnership will provide his firm with ‘a very strong platform to grow’ by prying into China’s vast market. Its shares closed up the daily limit of 7 per cent to NT$37.65. -- AP
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