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TSE easing rules to attract overseas Taiwanese firms

Taiwan Stock Exchange Corp (TSE) is trying to lure Taiwanese companies with operations in Southeast Asia to the nation's biggest bourse by easing rules and consolidating, its chairman said.

"We have about 800 Taiwanese companies in Southeast Asia," TSE chairman Wu Rong-i (吳榮義) said in an interview.

Taiwan is the biggest foreign investor in Vietnam, he said.

Taiwanese companies with businesses in Southeast Asia prefer to sell shares on the Singapore exchange, home of the region's biggest equities market.

About 50 Taiwanese companies trade on Southeast Asian bourses, Wu said.

To attract more companies, Taiwan needs to relax rules that restrict how much money companies can raise in an initial public offering (IPO), Wu said.

The nation plans to create this year a new stock market with lower listing requirements, favorable for small and medium-size companies.

Easing regulations on investing in China and merging the nation's four exchanges will help Taiwan compete with Hong Kong for companies with Chinese links, Wu said.

Hong Kong has drawn more IPOs than Taiwan since 2004, data compiled by Bloomberg show.

Taiwanese manufacturers, such as Hon Hai Precision Industry Co (鴻海精密), the nation's biggest electronics exporter, have spun off their Chinese assets to list in Hong Kong because of a rule capping investment in China at 40 percent of a Taiwan-listed company's assets. Taiwan doesn't allow Chinese companies trade on its exchanges.

However, the pro-China Chinese Nationalist Party's (KMT) landslide victory in legislative elections this month may lead to an easing of restrictions on Taiwanese companies investing in China.

The Taiwan Stock Exchange will gain size after merging with its three smaller rivals: the GRETAI Securities Market, Taiwan Futures Exchange and the Taiwan Depository & Clearing Corp. It ranks behind South Korea and ahead of Singapore as Asia's seventh largest, with a market capitalization of about US$696 billion.

The merged entity will take the name the Taiwan Exchange Holding Co and aims to hold an IPO early next year, Wu said.

Wu also said the TSE was discussing with Singapore Exchange Ltd and Tokyo Stock Exchange Inc cross-listings of exchange-traded funds.

ETFs are becoming more popular with investors because they are cheaper and easier to trade than similar mutual funds. Hong Kong Exchanges & Clearing Ltd, manager of Asia's third-biggest stock market, said on Wednesday it planned to roll out more ETFs after a tripling in their traded value last year.
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