The Financial Supervisory Commission (FSC) is considering expediting listed companies’ share issuance proposals to enhance efficiency in local capital markets, the commission said yesterday.
Listed companies must apply to the FSC before issuing new shares and often have to take into account rule changes, Securities and Futures Bureau Deputy Director Kuo Chia-chun (郭佳君) told a news conference in Taipei.
However, the commission is considering allowing firms to file applications covering multiple issuances within two years, Kuo said.
Under the proposed mechanism, a firm would need to report the total number of shares it is planning to issue and the total amount of funds it is planning to raise in the next two years, Kuo said.
If the commission approves the plan, the firm could issue multiple batches of shares without having to apply individually, Kuo said.
The mechanism would boost efficiency in the local capital markets by shortening issuance procedures from three months to one-and-a-half months, Kuo told the Taipei Times by telephone.
Under the current rules, it usually takes underwriters about one month to evaluate a company’s issuance plan, while reviews of issuance applications take another 17 days on average, Kuo said.
Eventually, it takes the company about one-and-a-half months to negotiate with shareholders that are willing to acquire the new shares, he added.
Under the new mechanism, approvals would cover multiple issuances and underwriters would not have to evaluate every single issuance plan, Kuo said.
However, the new mechanism would only apply to two types of listed companies: Firms with operation scales and capital expenditures above a certain limit and firms whose product development takes a longer time, Kuo said, adding that semiconductor firms and biotech companies would likely fall into the two groups.
The main reason that not all listed companies could benefit from the eased rules is that market regulators, including the Taiwan Stock Exchange, the Taipei Exchange and the FSC, would have to be more stringent in reviewing proposals by eligible firms, taking into account their financial files as well as their business outlook for the next two years, Kuo said.
Although there is no ban on listed companies posting red numbers that wish to issue new shares, regulators are usually more cautiously when reviewing their applications and demand business improvement plans, Kuo said.
Regulators would likely be more careful when reviewing applications that involve a firm’s future outlook, she said.
Based on the experiences with similar mechanisms implemented by regulators in the US, Japan and South Korea, the FSC would only open its new mechanism to certain companies, Kuo said.
The FSC would finish drafting the plan next quarter, Kuo said.
New share issuances raised a total of NT$58.5 billion (US$2.11 billion) in the first half of this year, up 99 percent from NT$29.3 billion a year earlier, FSC data showed.
Among 147 firms that issued new shares in 2019 or last year, 18 companies conducted more than one issuance, the data showed.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
UNCERTAINTIES: The world’s biggest chip packager and tester is closely monitoring the US’ tariff policy before making any capacity adjustments, a company official said ASE Technology Holding Inc (日月光投控), the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy. Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security. ASE subsidiary Siliconware Precision Industries Co (SPIL, 矽品精密) is participating in Nvidia