International bourse needs more study, premier says

Despite a heated discussion yesterday among Cabinet members about a planned international bourse, Premier Su Tseng-chang (蘇貞昌) said further study was needed before going ahead with the plan, which is aimed at bringing more investment back to Taiwan.

The premier made the remark after a regular Cabinet meeting in which a briefing was given by Wu Tang-chieh (吳當傑), director general of the Securities and Futures Bureau, on Taiwan's prospects for becoming a regional financial services hub.

Lu Daung-yen (呂東英), acting chairman of the Financial Supervisory Commission, said it was urgent for the government to push the international bourse plan forward, given that many Taiwanese businesses have chosen to be listed in overseas stock markets like Hong Kong or Singapore, causing a decline in the Taiwan Stock Exchange's share turnover and market capitalization.

Central bank Governor Perng Fai-nan (彭淮南) said that if the new market was to be established, its rules should be similar to those of Hong Kong and Singapore, otherwise neither Taiwan nor foreign businesses would be interested in listing on it.

Minister Without Portfolio Ho Mei-yueh (何美玥) said that the issue should be discussed alongside considerations on whether to lift the 40 percent limit on Taiwanese firms investing in China.

Taiwanese firms are banned from investing more than 40 percent of their total net assets in their China operations, a limit widely seen as a hurdle for Taiwanese enterprises seeking to expand their international operations.

As many Taiwanese firms are intending to establish overseas holding companies to list on other bourses in Asia, their Taiwan headquarters will become de facto subsidiary companies if the 40-percent ceiling issue is not resolved, Ho said.

Vice Premier Tsai Ing-wen (蔡英文) said the issue was complicated, and that the government needed to consider whether an international bourse was the only remedy for Taiwan's financial markets.