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Wednesday 28 October 2009
Taiwan’s TDR push in Singapore gathers pace
Interest in Taiwan as a secondary listing venue is rising among Chinese companies listed in Singapore and Hong Kong as China-concept stocks gain favour there, said an official from a Taiwanese brokerage.
Brokerage official says pool of rich investors is a big draw for companies
By LYNETTE KHOO 28 October 2009
(SINGAPORE) Interest in Taiwan as a secondary listing venue is rising among Chinese companies listed in Singapore and Hong Kong as China-concept stocks gain favour there, said an official from a Taiwanese brokerage.
Polaris Securities vice-chairman CY Huang told BT that ‘more China companies listed in Hong Kong and Singapore are interested to explore TDRs (Taiwan Depository Receipts)’.
He declined to reveal if his firm is handling other mandates apart from Oceanus Group, which yesterday announced its plan to offer and list TDRs.
Companies are encouraged to list TDRs - which is the only way to do secondary listing in Taiwan - following the warm reception of those that have taken the leap.
Of the China-concept stocks, companies that market to Chinese domestic consumers are more favoured by Taiwan investors than the export companies operating in China, Mr. Huang said.
A major draw is Taiwan’s large pool of high net worth individuals (HNWI) that provides an attractive market for diversification of shareholder base, Mr. Huang said.
‘Investors are also familiar with both upstream and downstream tech stocks,’ he added.
Small and mid-cap companies will also be more visible on the Taiwan bourse, unlike in Hong Kong where they may be lost in the pool of large state-owned Chinese enterprises.
‘The Taiwan Stock Exchange is pushing very hard to attract more companies to list in Taiwan,’ Mr. Huang said. Since last July, Taiwan has relaxed certain restrictions on foreign issuers.
This includes removing the cap on the amount of capital raised by a foreign issuer on the Taiwan Stock Exchange (TWSE) that may be used for direct or indirect investment in mainland China.
Such a move has spurred four new TDRs this year, compared to four TDRs listed over the past 15 years. TWSE chairman Chi Schive has projected that the total number of TDRs will hit 10 by year- end and 34 next year.
‘The first wave of Taiwanese companies that have gained successful recognition in their listings in Taiwan has triggered a second wave of foreign companies that also want to tap the market,’ Mr. Huang said.
If the Taiwanese authorities take the next step to curb regulatory hurdles for Chinese companies, this could create a third wave of private-sector China companies streaming in to list in Taiwan, Mr. Huang said.
Currently, companies that are registered on the Chinese mainland cannot list in Taiwan.
‘I foresee the potential candidates can be as many as over 100 Chinese IPOs within three years,’ Mr. Huang said.
Secondary listings of these companies could soar to the same region as well if the roadblock is removed.
There are some 30 Chinese IPOs in the pipeline but these have had to go through a long restructuring process into wholly owned foreign entities and await the long approval process in Taiwan.
Mr. Huang noted the Taiwanese authorities are mixed in their views on the policy towards Chinese companies.
‘On the one hand, they want underwriters to attract a lot of mainland-based companies to Taiwan. On the other hand, they are worried about the quality of these companies.’
Still, the Taiwanese stock market is enjoying ‘peace dividends’ given the warming of ties between Taiwan and China.
Mr. Huang pointed out that the upcoming memorandum of understanding on financial supervisory cooperation with China and an economic cooperation framework agreement will add further momentum to the Taiwanese market.
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Taiwan’s TDR push in Singapore gathers pace
Brokerage official says pool of rich investors is a big draw for companies
By LYNETTE KHOO
28 October 2009
(SINGAPORE) Interest in Taiwan as a secondary listing venue is rising among Chinese companies listed in Singapore and Hong Kong as China-concept stocks gain favour there, said an official from a Taiwanese brokerage.
Polaris Securities vice-chairman CY Huang told BT that ‘more China companies listed in Hong Kong and Singapore are interested to explore TDRs (Taiwan Depository Receipts)’.
He declined to reveal if his firm is handling other mandates apart from Oceanus Group, which yesterday announced its plan to offer and list TDRs.
Companies are encouraged to list TDRs - which is the only way to do secondary listing in Taiwan - following the warm reception of those that have taken the leap.
Of the China-concept stocks, companies that market to Chinese domestic consumers are more favoured by Taiwan investors than the export companies operating in China, Mr. Huang said.
A major draw is Taiwan’s large pool of high net worth individuals (HNWI) that provides an attractive market for diversification of shareholder base, Mr. Huang said.
‘Investors are also familiar with both upstream and downstream tech stocks,’ he added.
Small and mid-cap companies will also be more visible on the Taiwan bourse, unlike in Hong Kong where they may be lost in the pool of large state-owned Chinese enterprises.
‘The Taiwan Stock Exchange is pushing very hard to attract more companies to list in Taiwan,’ Mr. Huang said. Since last July, Taiwan has relaxed certain restrictions on foreign issuers.
This includes removing the cap on the amount of capital raised by a foreign issuer on the Taiwan Stock Exchange (TWSE) that may be used for direct or indirect investment in mainland China.
Such a move has spurred four new TDRs this year, compared to four TDRs listed over the past 15 years. TWSE chairman Chi Schive has projected that the total number of TDRs will hit 10 by year- end and 34 next year.
‘The first wave of Taiwanese companies that have gained successful recognition in their listings in Taiwan has triggered a second wave of foreign companies that also want to tap the market,’ Mr. Huang said.
If the Taiwanese authorities take the next step to curb regulatory hurdles for Chinese companies, this could create a third wave of private-sector China companies streaming in to list in Taiwan, Mr. Huang said.
Currently, companies that are registered on the Chinese mainland cannot list in Taiwan.
‘I foresee the potential candidates can be as many as over 100 Chinese IPOs within three years,’ Mr. Huang said.
Secondary listings of these companies could soar to the same region as well if the roadblock is removed.
There are some 30 Chinese IPOs in the pipeline but these have had to go through a long restructuring process into wholly owned foreign entities and await the long approval process in Taiwan.
Mr. Huang noted the Taiwanese authorities are mixed in their views on the policy towards Chinese companies.
‘On the one hand, they want underwriters to attract a lot of mainland-based companies to Taiwan. On the other hand, they are worried about the quality of these companies.’
Still, the Taiwanese stock market is enjoying ‘peace dividends’ given the warming of ties between Taiwan and China.
Mr. Huang pointed out that the upcoming memorandum of understanding on financial supervisory cooperation with China and an economic cooperation framework agreement will add further momentum to the Taiwanese market.
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