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TSE seeking sale of 25% holding to overseas buyers

The Taiwan Stock Exchange Corp (TSE) is seeking to sell up to 25 percent of its shares to overseas exchanges, including the New York Stock Exchange, to drive IPOs amid growing competition, a company executive said yesterday.

The TSE, which operates Asia's No. 7 stock market, has faced stagnancy in luring initial public offerings (IPO) in recent years because of its limited scale and a 40 percent cap on local firms investing in China.

"We are facing growing competition from the around the globe," chairman Wu Rong-i (吳榮義) told a year-end press briefing. "Decline in the number of listings is an important issue for any exchange."

A total of 698 companies are traded on the Taiwan Stock Exchange compared to 697 in 2004.

To strengthen its competitiveness, "we have approached some [foreign] exchanges," Wu said.

Selling shares to potential partners would be one option, Wu said.

"Twenty-five percent may be a benchmark," he said.

The TSE has been in preliminary talks with Deutsche Borse AG, the New York Stock Exchange and NASDAQ, Wu said.

"The sale of stakes to overseas exchanges would boost the Taiwan Exchange's brand and may attract more companies to list on the local bourse in the long term," said Kevin Chung (鐘國忠), an analyst with Jih Sun Securities Investment Consulting Co (日盛投顧).

The TSE could sell a stake to potential partners via its planned IPO before the end of next year, a report by the Financial Times said yesterday, citing Wu.

"We need to increase our bargaining chips by pushing for the four-way merger," he said. "No timetable has been set yet."

The share offering would be followed by a merger of the nation's secondary bourses, the Taiwan Futures Exchange (台灣期貨交易所), the GreTai Securities Market (櫃台買賣中心) and the Taiwan Depositary and Clearing Corp (台灣集中保管結算所), Wu said.

The four-way merger as well as the IPO would require legislative approval.

"Most legislators and professionals have agreed to the proposal. I believe the new legislature will give the green light as soon as election pressures are gone," Wu said.
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