A delegation of lawmakers from the legislature’s Finance Committee is set to visit China next week to initiate semi-official discussions on a cross-strait financial agreement.
Two government representatives, Financial Supervisory Commission Vice Chairman Wu Tang-chieh (吳當傑) and Deputy Minister of Finance William Tseng (曾銘宗), will accompany the legislative observation team, Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆), the trip’s organizer, said yesterday by phone.
The delegation will visit Chinese banking, insurance and securities regulators in Beijing from next Wednesday to Sunday, Lai said.
“We hope the trip will provide a platform paving the way to the signing of a financial MOU [memorandum of understanding] between Taiwan and China soon,” the legislator said.
Taiwan and China are poised to sign agreements allowing investments in each other’s financial industries under a framework for cooperation reached on April 26. An MOU on market access is likely to be finalized and signed next month, Lai said earlier.
“The signing of an MOU is crucial, as it will form the basic framework for broader cross-strait financial cooperation,” Chen Tsu-pei (陳祖培), president of Cathay Financial Holding Co (國泰金控), the nation’s largest publicly traded financial services company, told Bloomberg yesterday.
Chen said the company might send some executives to join up with the delegation in China.
The local stock market yesterday surged the most in a month following the announcement.
The TAIEX advanced 3 percent to 6,380.08 at the close of trading in Taipei, the biggest gain since May 27, on turnover of NT$127.98 billion (US$3.89 billion).
The financial sector led the broad market, surging 6.43 percent.
Cathay Financial surged 6.9 percent to NT$48.55, the most since May 5. Fubon Financial Holding Co (富邦金), Taiwan’s second-biggest financial services company, climbed 5.2 percent to NT$31.30.
Chinatrust Financial Holding Co (中信金), parent of the nation’s biggest credit-card issuer, climbed 7 percent to NT$19.95, the most since May 27. The Taipei-based company said on May 7 it planned to set up units and branches in China once Taiwan signs a financial agreement with China. It also aims to buy stakes in Chinese lenders.
The TAIEX is the world’s ninth-best performer among 89 stock gauges tracked by Bloomberg, rising 39 percent this year.
“It’s China, and when it’s about China, investors get excited,” said Kevin Yang (楊師銘), who manages US$150 million as chief investment officer of Paradigm Asset Management Co (華頓證券投信) in Taipei. “It is probably over-hyped, but this is what moves the market.”
Alex Huang (黃國偉) of Mega International Investment Services (兆豐證券) agreed, but said: “The market should have rebounded [in any case] following the recent correction.”
China said on April 29 it would end a ban on investment in Taiwan from next Wednesday after accords signed on April 26 allowed cross-strait operations by financial-services companies, expanded direct flights and joint mechanisms for fighting crime.