Thu, Oct 05, 2006 - Page 12 News List

TSEC mulls cutting requirements for new firm listings

By Jason Tan  /  STAFF REPORTER

The Taiwan Stock Exchange Corp (TSEC) is mulling plans to lower the capital requirements for new companies to list on the local bourse, in a bid to attract more investments.

"We are still considering several possibilities to attract companies," Wen Li-chung (聞立中), TSEC's public relations manager, said in a telephone interview yesterday.

Wen said the stock exchange has talked to several securities brokerages, which have suggested slashing the paid-in capital prerequisite for initial public offerings (IPOs) to NT$300 million (US$9.1 million), from the current NT$600 million.

Concrete proposals will hopefully be fleshed out by the end of this month, he said.

The idea of cutting capital requirements is aimed at luring more local and foreign money into the country, as an increasing number of Taiwanese firms and subsidiaries are launching IPOs in Hong Kong.

This allows local firms to bypass the government's restrictions on China-bound investment. China is the main investment destination for Taiwanese firms.

The Cabinet introduced a plan last Wednesday to beef up the financial market, aiming to attract 250 companies to list on the local stock markets within the next three years.

The Cabinet also wants to see NT$100 billion worth of foreign-currency bonds on issue by 2009, and for foreign ownership of domestic stocks to increase from nearly 31 percent -- as of the end of August -- to 35 percent.

There are 687 listed companies on the TSE and another 12 plan to join the main bourse by December. The GRETAI has 530 listed firms and is Taiwan's biggest bond exchange.

On Tuesday, the Financial Supervisory Commission approved an application by Deutsche Bank AG to issue Taiwan's first foreign currency-denominated bonds. The bank said in the application that it planned to sell as much as US$500 million worth of debt.

TSEC's new chairman Gordon Chen (陳樹) said on Aug. 10 that he had plans to attract more state-run companies to list on the exchange. He said Taiwan Tobacco and Liquor Corp (台灣菸酒公司) and the Bank of Taiwan (台灣銀行) were possible candidates.

However, some dealers said yesterday that the GRETAI could lose at least two-thirds of potential listers if the TSEC lowers its paid-in capital requirement.

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