The nation’s main stock exchange will seek to improve the local capital market by collaborating with its Asian counterparts, a Taiwan Stock Exchange (TWSE, 台灣證券交易所) executive said yesterday.
“Taiwan’s annual capital outflow is estimated at about NT$2 trillion [US$63 billion] annually,” TWSE president Michael Lin (林火燈) said at a press conference after the Asian Exchange Forum in Taipei.
Representatives from 10 Asian countries’ stock exchanges — including Japan, South Korea, China, Vietnam, Indonesia and Singapore — attended the forum, which was organized by the TWSE.
Through closer ties with other stock exchanges, about half of the capital outflow may be funneled through the TWSE to boost local trading volume, Lin said.
This could stimulate local brokering, depositary and clearing businesses, while providing investors with more options in which their interests are safeguarded by regulators, he said.
Lin said that representatives from neighboring stock exchanges all expressed an interest in furthering ties and collaborations with each other, and hope to introduce new products and stock exchange links.
Impressed by Taiwan’s many small and medium-sized technology companies, and their ability to pay out relatively high dividends, Japan and South Korea expressed an interest in possible collaboration opportunities, he said.
In particular, South Korean representatives brought up the possibility of devising a new stock index with Taiwan to tap into the trading potential of the nation’s technology companies, Lin said.
However, he said that a stock market link between the TWSE and the Korea Stock Exchange, and cross-listing of exchange-traded-funds (ETFs) on the two exchanges are not being considered at the moment.
He added that establishing stock exchange links and ETF cross-listings are not easy, as they have to deal with more technical and regulatory issues, in addition to finding market-makers and determining the types of products that will appeal to investors on other exchanges.
Although the Hong Kong-Shanghai stock market link has been operating for six months, preliminary work that went into its establishment took two years, Lin said.
Asked by reporters about his views on the capital gains tax on securities transaction, Lin said the issue did have an effect on the local stock market after first causing a market panic in 1988.
“Taiwanese investors panicked because they were not able to easily verify if the amount of capital gains tax they ought to pay was correct, as the local trading mechanism made it very difficult to calculate one’s gains and losses from trading, and this type of deep uncertainty proved to be catastrophic,” Lin said.
“The goal of the TWSE and the Financial Supervisory Commission is to aid the government in maximizing tax revenues under a system that is feasible and conducive to the nation’s capital market development,” Lin said.
“The equity market is an important facet of a nation’s economic growth, as direct financing is much more efficient than going through the banking system,” he said.
On Thursday, the commission released the results of the Securities and Futures Institute’s survey of major market players, brokerage firms and retail investors.
It showed that heavy tax burdens, difficulty turning a profit and plans to reallocate funds overseas were the top three reasons affecting many major market players’ interest in the local stock market.
As for retail investors, volatility in international markets, increasing misgivings caused by the TAIEX’s continued rise and excessive tax burdens on trading were the main holding them back from the market, the survey showed.
CLIENTS’ RIGHTS: Banking Bureau Deputy Director-General Lin Chih-chi said the buyer and Citibank Taiwan would need to disclose changes to branch operations DBS Bank Taiwan (星展台灣), the local unit of Singapore-based DBS Group Holdings Ltd, has reportedly won a bid to acquire Citibank Taiwan Ltd’s (花旗台灣) consumer banking business, but the two companies declined to confirm the report yesterday. Citibank Taiwan’s consumer banking business is to be sold for about NT$60 billion (US$2.17 billion) to DBS Taiwan, the Chinese-language Economic Daily News reported on Sunday. DBS Taiwan and its parent company are expediting the negotiations with the seller’s US-based parent company, while other local bidders, including Fubon Financial Holding Co (富邦金控) and Cathay Financial Holding Co (國泰金控), have dropped their bids, the report said. Citibank
‘BULLISH YEAR AHEAD’: The contract chipmaker set a growth target of up to 29 percent, as it expects to outperform its peers in the semiconductor industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is planning to boost this year’s capital expenditure budget by about 46 percent to exceed US$44 billion, citing strong customer demand for advanced technologies used in high-performance computing (HPC) and 5G-related applications, the world’s largest contract chipmaker said yesterday. The plan marks a record spending for TSMC after the chipmaker budgeted US$30 billion for capacity expansions at home and overseas fabs last year. TSMC is planning to allocate about 80 percent of this year’s capital spending for advanced chip capacity expansion including 2-nanometer, 3-nanometer, 5-nanometer and 7-nanometer technologies. The chipmaker reiterated that it is on
Siltronic AG cast doubt on a planned US$5.3 billion takeover by GlobalWafers Co (環球晶圓), saying the German Ministry of Economic Affairs and Climate Action’s feedback so far was opaque and offered no clear resolution on how to win approval for the deal. During recent discussions, the companies did not receive any information as to whether and under which conditions a clearance for the takeover might be issued, the German company said in a regulatory filing on Friday following a news report on remedies the companies have offered. In the ministry’s view “in this case, a mitigation agreement is apparently not suitable
BELLWETHER COMPANY: A failed fundraiser at Country Garden, thus far unaffected by issues at Evergrande, is feared to prompt widespread repricing of developer stocks A crisis engulfing China’s property sector is affecting its biggest developer, with Country Garden Holdings Co’s (碧桂園) shares and bonds hammered amid fears that a reportedly failed fundraising effort might be a harbinger of waning confidence. Country Garden is one of the few remaining large, better-quality private developers that had been largely unscathed by the liquidity crunch, even as peers, such as Shimao Group Holdings Ltd (世茂集團), saw dramatic reversals in their credit ratings. The firm is viewed as a bellwether for contagion risk, as unprecedented levels of stress in the offshore credit market threaten to drag good credits down alongside bad
RSS