MSCI Inc’s addition of A-shares denominated in yuan might weigh on the nation’s initial public offering (IPO) activity as more local firms with overseas operations might seek listings in the Chinese market, Ernst & Young Taiwan said yesterday.
As of last week, the Taiwan Stock Exchange and Taipei Exchange markets had seen 20 IPO deals, raising a total of NT$7.013 billion (US$231.2 million), the consultancy said.
The results suggested a significant retreat from the same period last year, as the local stock market’s turnover remained modest and concentrated on a few heavyweight technology shares, even though the TAIEX surpassed the 10,000-point mark, Ernst & Young Taiwan’s chief executive officer Andrew Fuh (傅文芳) said.
The inclusion of A-shares on the MSCI, a closely tracked global investment index, might lure more funds to the Chinese bourse, making IPO applications in Taiwan less attractive, Fuh said.
Only four foreign-registered Taiwanese firms sought primary listings in local capital markets in the first half and the number might drop further as A-shares gain popularity and Chinese authorities speed up reviews for applications, Fuh said.
Chinese securities authorities used to spend three to four years reviewing bids to list A-shares, but have demonstrated much better efficiency this year as evidenced by the rapid increase in IPO deals, the consultancy’s assurance leader Lin Tu (涂嘉玲) said.
There were 246 IPO deals in China with firms raising 125.6 billion yuan (US$18.37 billion) in the first half, more than three times last year’s showing, Tu said, adding that the number of firms waiting for regulatory approval fell by 20 percent to 585.
Chinese shares enjoy higher price-to-earnings ratios with returns for new shares averaging 153 percent, stronger than markets elsewhere, the consultancy’s semi-annual report showed.
“Some customers have voiced preference for listings on Chinese bourses,” Fuh said.
There might be from 50 to 60 IPO deals in Taiwan this year led by firms in the technology and biotechnology sectors, Fuh said.
While global funds have raised significant positions in local shares this year, they have concentrated on a few heavily weighted shares, lending little support to IPO activity, Fuh said.
The company is to help court Taiwanese firms based in South Asia and Southeast Asia as the nation is seeking to strengthen trade ties with the region, Fuh said.
The effort might produce limited success because of Taiwan-specific corporate governance requirements, Fuh said.
“Authorities should be more flexible in dealing with firms based abroad if they are serious about winning them over,” Fuh said.
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li