Taiwan may open equity market to mainland individuals for first time
Print Edition
TAIWAN may open up its stock market for the first time to individual Chinese mainland investors later this year in a bid to attract more investments to its shrinking bourse, officials said yesterday.
Taiwan’s Financial Supervisory Commission said that it was hoping to decide in June whether to go ahead with the plan.
Currently Chinese mainland institutions are allowed to invest in Taiwan’s stock market, but individuals are not.
The new linkup would allow individuals to buy or sell stocks listed on the Taiwan bourse through offshore securities units of local brokerages.
“We hope to attract more investors to Taiwan’s stock market,” said Wu Yui-chun, director of the FSC’s securities and futures bureau.
On Wednesday, FSC Chairman William Tseng said: “When Chinese mainland people visit Taiwan, they will be able to not only buy local pineapple cakes, but also buy local shares by opening accounts in Taiwan.”
Daily trading volume has shrunk in Taiwan to around NT$90 billion (US$2.9 billion), down from NT$130 billion at its height in the 1990s, as Taiwan investors sought to diversify their investment portfolio.
Taiwan has allowed mainland institutional investors to invest up to US$500 million in its stock market since 2010, amid improving ties between the two sides.
Analysts were cautious over whether the new move would appeal to mainland buyers.
“It is not clear if the opening-up of the market will lure investors — the Chinese mainland market seems more attractive since it’s much bigger and it’s on the rebound,” said Vickie Hsieh of President Capital Management Corp.
“However, Taiwan has its own niche as it is strong in the semiconductor industry.”
Tseng also said the mainland individuals would also be subject to the same restrictions on institutional investors.
Under Taiwan regulations, mainland institutional investors can own up to a 10 percent stake in local gas, financial or other companies controlled by the economic ministry, and 8 percent ceiling for shipping companies.
However, they are barred from buying airlines, air cargo, futures, construction, real estate and broadcasting stocks.
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