Lien plans to revamp the markets

Securities houses welcomed vice president and KMT presidential candidate Lien Chan's (3s戰) announcement yesterday promising several changes to deregulate the stock market.

Lien's plans include streamlining administrative procedures so that OTC-listed companies can easily switch to the Taiwan Stock Exchange. In addition, Lien vowed to extend trading hours into the afternoon later this this year and said the second OTC board would be operational by April.

"It is inarguably a move in the right direction," said K.P. Liu (劉3穸-), president of the SinoPro Investment Consulting Co Ltd.

Huang Ming-chu (黃敏助), CEO of the OTC market, said that the streamlining of procedures would lead to a larger stock market, an appropriate move in light of Taiwan's anticipated entry into the WTO.

Meanwhile, the OTC market will become a preparatory market for public companies before they are listed on the Exchange.

Any company with capitalization of less than NT$500 million will not be able to list its shares directly on the Exchange; instead, it will have to trade on the OTC board first.

Huang also noted that 120 companies now listed on the OTC would be able to list on the TSE, and the number of TSE companies would eventually increase from 400 to more than 700.

By increasing the number of listed companies to more than 700, Taiwan's securities market would become one of the largest in Asia, thus attracting more foreign investment.

And the move could turn out to be a bargaining chip when it comes to negotiations for dual-listings on other international stock exchanges.

In addition, after the mechanism for OTC second board is established -- which is expected by the end of March -- about 150 new companies may be listed on OTC market, followed by 200 more the next year, Huang said.

Lien said that easier listing requirements for the second OTC board would help companies in the high-technology sectors and small and medium business, which could use the securities market to raise much-needed funds.