Print

Mail

wiki links

Open-market plans on track, Kong says

"Efforts to internationalize the nation's capital markets are the best and the necessary way to develop Taiwan into a regional fundraising hub."

Kong Jaw-sheng, Financial Supervisory Commission chairman

The government's plans to invite overseas companies to list stocks and bonds denominated in US dollars in Taiwan will be finalized within the next six months, the Central News Agency reported yesterday, citing Financial Supervisory Commission chairman Kong Jaw-sheng (龔照勝).

As part of government efforts to open the nation's markets further and attract international currencies, the commission is considering allowing overseas investors to conduct bonds trading first, Kong said.

"Efforts to internationalize the nation's capital markets are the best and the necessary way to develop Taiwan into a regional fundraising hub," the report quoted Kong as saying.

Kong made the remarks at a forum on financial reform at the National Taiwan University in Taipei. The forum was organized by the Ketagelan Academy (凱達格蘭學校) and was also attended by Minister of Finance Lin Chuan (林全).

The government is considering establishing foreign-currency financial products and an offshore market to encourage overseas firms, including Taiwanese companies investing in China, to trade on local capital markets.

As an increasing number of Taiwan's manufacturers have relocated overseas, "If Taiwan [does] not establish `offshore capital markets,' Taiwanese businessmen will become clients of other financial markets," Kong said in the report.

The chairman's warning came at a time when many local manufacturers have shifted their investments to China to cut costs and they may follow the path blazed by Foxconn International Holdings Ltd (富士康控股), a handset manufacturing affiliate of Hon Hai Precision Industry Co (鴻海精密), to raise funds through an initial public offering in Hong Kong.

Pushing forward the planned offshore market will not only boost the nation's economy, but also generate potential business opportunities, increase tax revenue and create jobs, according to Kong, who formerly headed the Taiwan offices of Lehman Brothers Holdings Inc and Credit Suisse First Boston, before taking the commission's helm in July last year.

Taking global depositary receipt (GDR) issuance as an example, Kong said that Taiwan companies used to go abroad to issue GDRs which, however, created job opportunities for accounting and underwriting sectors in the foreign markets.

A GDR is a certificate which represents ownership of a given number of a company's shares and which can be listed and traded independently from the underlying shares. Underwriters are responsible for informing investors of their pricing for new listings, while accountants are charged with monitoring possible risks involving the listings.

The commission has completed a draft on offshore capital markets and is in intense discussions with financial experts and the related government agencies, Kong said. Once the plans are approved by the Cabinet, the commission will conduct an overseas road-show to attract foreign investors' attention, he said.
This story has been viewed 1769 times.