The number of companies completing applications to conduct initial public offerings (IPOs) in Taiwan fell to 17 in the first seven months of this year from 35 a year earlier, as some firms could not meet the listing requirements, the Financial Supervisory Commission said in a report released by the Legislative Yuan earlier this week.
In the first seven months of this year, 10 companies applied to be listed on the Taiwan Stock Exchange (TWSE), down from 17 last year, and 7 companies applied to have their shares traded on the Taipei Exchange (TPEX), down from 18 last year, the report showed.
Sixteen firms debuted their shares on the Emerging Stock Board — a preparatory board for the TWSE and TPEX — down from 21 last year, the commission said.
“The number of companies that applied to conduct IPOs on the nation’s two main bourses has continued to decrease from 95 in 2011 to 57 last year, which should serve as a warning for the domestic financial market. The authorities should monitor this issue,” the Legislative Yuan Budget Center said in a report.
The commission attributes the decline in IPO applications to the appreciation of the New Taiwan dollar against the US dollar, which has negatively affected some export-oriented companies, while some companies have seen the value of their overseas assets decline due to the weaker US dollar, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) said by telephone on Monday.
“Some firms held back from listing as they failed to meet the listing requirements on net value or profitability amid the currency fluctuations, while several companies chose to apply later, despite meeting the exchange requirements, as they hoped to perform their best when debuting,” Tsai said.
Uncertainty due to the US-China trade dispute has weighed on IPO plans, with some companies preferring to wait until the tensions ease, she said.
The commission remains confident in local IPOs given the nation’s transparent environment, a clear schedule for application reviews, and fewer restrictions on fund inflows and outflows, she added.
Hotai Finance Co (和潤企業), a vehicle loans and insurance service unit of Hotai Motor Co (和泰汽車), on Tuesday submitted its application for a listing on the TWSE, with its paid-in capital totaling NT$3.74 billion (US$120.4 million), the highest of this year’s applicants, TWSE spokeswoman Rebecca Chen (陳麗卿) said.
A few companies are expected to submit IPO applications over the next three months, Chen said.
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