After the government yesterday announced it would allow companies co-owned by Chinese investors to cross-list here, some 17 overseas companies with Taiwanese ties expressed interest in returning to list on the Taiwan Stock Exchange or GRETAI Securities Market, financial regulators said yesterday.
As many as nine of the companies, including conglomerates such as food maker Want Want China Holdings Ltd (中國旺旺控股公司), electronics manufacturer Foxconn Technology Group (富士康集團) and Delta Networks Inc (達創科技), a maker of communications equipment for customers such as Alcatel Lucent and Nortel Networks Corp, are interested in dual-listing on the TAIEX. The other eight companies plan to list on the over-the-counter GRETAI, Financial Supervisory Commission (FSC) Chairman Gordon Chen (陳樹) told a media briefing yesterday.
“Encouraged by the government’s deregulatory policies, these companies told our exchanges that they have decided to list here because the 40 percent cap ... on their future China-bound investment is entirely gone,” Chen said.
Some of the companies plan to issue Taiwan depositary receipts (TDR) soon, FSC Vice Chairman Wu Tang-chieh (吳當傑) said.
When asked whether the policy change was unfair to domestic TAIEX-traded companies, which are still restricted from investing more than 60 percent of their capital in China, Chen said: “The capital cap is the main hurdle that keeps overseas companies from cross-listing here and Taiwan should continue to open up, which will boost the nation’s capital market and be quite advantageous to the local economy.”
He also said he did not believe that local companies would seek to take advantage of the change by listing elsewhere before dual-listing here, since it would take at least three years to do so.
David Lee (李榮福), chairman of Fujian Fuzhen Metal Packing Co (福貞金屬包裝), yesterday told the Taipei Times that his China-based company had been waiting for the government to scrap the investment cap since 1997 to list on the TAIEX. His company also plans to list in China.
Moreover, “at least 400 China-based Taiwanese companies [with or without Chinese investors] are also interested in listing on the TAIEX if the capital cap is scrapped completely,” he said on the sidelines of a seminar co-organized by China Credit Information Services Ltd (CCIS, 中華徵信) and Hong Kong and Shanghai Banking Corp (HSBC, 匯豐銀行) in Taipei.
In addition to the investment cap, business and inheritance taxes remain another listing consideration for overseas Taiwanese businesses, Gre Tai Securities Market president Wu Yui-chun (吳裕群) said at the seminar yesterday.
Chen yesterday expressed hope that deregulatory measures would soon attract foreign capital and boost the local bourse’s market capitalization, which was ranked the 20th in the world as of June behind Shanghai, Hong Kong and South Korea.
Meanwhile, Wu estimated yesterday that qualified domestic institutional investors (QDII) in China might be able to invest up to US$1.125 billion in Taiwanese stocks and futures as China imposes a 3 percent cap on QDII investments to countries that have not inked memorandums of understanding (MOU) with China, including Taiwan.
Chinese regulators will have the final say, however, on QDII investment in Taiwan, Wu said.