Wave of Delisting Firms from Market Is the Tip of the Iceberg

 Wave of Delisting Firms from Market Is the Tip of the Iceberg

United Daily News Editorial (Taipei, Taiwan)

April 22, 2018

 Translation of an Excerpt

Tseng Ming-chung recently made an explosive exposé, pointing out that quite a few listed firms on the stock market were inquiring how to delist from the Taiwan stock market and to list on the Mainland A shares market; he reminded the government to take note of the development of this “wave of delisting.” Tseng Ming-chung served as chairman of the Financial Supervisory Commission (FSC) for many years; he raised this caveat, immediately eliciting discussions. Some said that it was a non-issue; some said that the under currents were turbulent; some others urged the government to quickly draw up measures to forestall the wave. Although the delisting wave has not yet exploded, the Taiwan stock market is facing strong pressures of “pushing out from the inside and sucking from the outside,” which must be dealt with actively.

Taiwan’s firms moved westward for deployment and listed on the Mainland stock markets as the next step; this was a reasonable progression for enterprise development. However, currently what we should worry about is not this kind of invisible exodus dubbed delisting, it is the industrial prospects and employment opportunities which are taken away. The government has been pushing for the return of Taiwan businesses on the Mainland to list on Taiwan’s stock markets; in the last ten years, 100 have responded by returning. In contrast with the hordes of hundreds of thousands of Taiwanese businesses overseas, it underscored the choices of Taiwanese businesses.

Taiwan stocks are gradually losing their attraction; it may be said this is the result of “pushing out from the inside and attracting from the outside,” becoming even more so today. Let’s talk about “attracting from the outside”, technological innovation is a rule for economic growth; seeking new innovative industries to list on a countries stock markets is a global trend nowadays. All major stock exchanges have been striving to enlist businesses without exception; some Taiwan businesses have confirmed that they have received invitations, or expressed interest. The other side of the Strait is even more active in this area; at the end of last year, it released information to assist Taiwan businesses to list on the Mainland markets, even clamoring to form "Taiwan business stocks." This year, the Mainland made public 31 preferential measures for Taiwan, plus the earlier paradigm that it had approved the listing of Foxconn Industrial Internet Co Ltd (FII) stocks with lightning speed, and later the capital raising effects of including MSCI in the Mainland A shares stock market, all made it irresistible for businesses.

Looking back at Taiwan stocks, although agencies such as the Taiwan Stock Exchange have been courting businesses everywhere, under the excessive maneuverings of two psychologies to forestall scandals and block China, it in actuality has produced the effect of “pushing away” businesses. Taiwan stocks possess an integral manufacturing chain and many high-quality listed companies, thus, having a standard of dividend yield, attracting global capital. The government must rectify its mentality to retain businesses, which is fundamental to strengthening Taiwan’s capital markets.

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