Wed, Jul 22, 2009 - Page 12 News List

Recession affects capital raising: bureau

By Joyce Huang  /  STAFF REPORTER

The economic recession has taken a toll on fundraising by the nation’s publicly traded companies, dropping 41 percent year-on-year to NT$167.6 billion (US$5.1 billion) in the first half of this year, statistics from the Securities and Futures Bureau showed.

That also represented a 67 percent decline from the second half of last year, the Financial Supervisory Commission said in a statement.

However, the total amount of capital raised via private placements grew to NT$59.2 billion in the first half of this year, from NT$48.5 billion in the second half of last year, accounting for 37 percent and 22 percent respectively of the total.

“It’s becoming a trend for companies to resort to private placements, which can help them locate strategic investors more easily within a short timeframe,” a bureau official said, adding that the “procedure is also simpler.”

Of the total capital raised in the first half, NT$42.6 billion came from capital injection, NT$42 billion via the issuance of corporate bonds and NT$8.3 billion via the issuance of convertible bonds, the commission said.

The figures also showed 49 percent of the capital raised in the first six months was used to repay debts and 25 percent to support corporate management and operations.

By sector, electronics along with banking and insurance raised the highest amount of capital at NT$20.5 billion and NT$27 billion respectively, the commission said.

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