Research of Taiwanese Enterprise's View in Deciding a Listing between Taiwan and Hong Kong Stock Markets
Date Issued
2007
Date
2007
Author(s)
Liao, Hung-Huei
DOI
zh-TW
Abstract
Taiwan stock market developed significantly since 1987 in a stellar bullrun fueled by loosened foreign exchange control, steeply-appreciated local currency, and opening for new securities firms. Investors participated in the market in an aggressive way, leading to consecutive waves of record-setting in stock trading turnover. But the rampant bullishness faded away after 2002 due to deteriorated investment environment which resulted into an outbound investment. China market allured Taiwanese businessmen the most by their opening doors in domestic market and favorable policies toward Taiwanese.
Taiwan businessmen have long been irked in seeking financial loans in mainland China. Taiwan’s still-existing laws restricting the parent companies to pour money in China under a ratio of 40% against their equity further adds to their woes. To solve the quandary, they have planned to raise needed capital by listing their companies’ stocks in Hong Kong, albeit not so enthusiastically in the beginning. The sentiment turned stronger in 2004 when China inked a firmer economic tie with Hong Kong under the CEPA Act, driving China enterprises to launch rounds of IPOs there to improve their international images. With rising trading as well as PE ratio, Hong Kong has emerged as a market marked by more China plays and a coffer luring global money. Taiwan businessmen also rode the trend to flock toward the bourse, with the most prominent IPO example, Foxconn, a subsidiary of Taiwan Hon Hai Precision Industry. As Taiwan firms have piled in the IPOs tide in Hong Kong, Taiwan stock market then lost its luster.
The research mainly adopts a comparative basis focused on the following issues:
1.Comparison of PE ratios and liquidity (daily trading volume) between the newly-listed firms in Taiwan and 41 Taiwanese firms in Hong Kong during 2005 and 2006.
2.Market scale between Taiwan and Hong Kong.
3.Listing requirements between Taiwan and Hong Kong stock exchanges.
The research also includes the interview with two Taiwanese firms to gain their reasons for listing in Hong Kong. Their empirical evidence is hoped to find out ways to revive Taiwan stock market. The conclusion is also aimed at providing clues and reference for Taiwan government and local companies interested at making inroads in Hong Kong bourse.
Subjects
台商
初次上市
初次上市現金增資
可轉換公司債
本益比(市盈比)
日均量
證券交易所
資本市場
證券市場
Taiwanese Firm
Initial Public Offer
Sequential Public Offer
Convertible Bond
PE ratio
Daily trading volume
Stock Exchange
Capital Market
Stock Market
Taiwan Deposit Receipt (TDR)
Type
other
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