Taipei, Oct. 25, 2012 (CENS)--In order to revitalize the international-board bond market, the GreTai Securities Market (the over-the-counter market) has proposed to the Financial Supervisory Commission (FSC) allowing simultaneous listing of ECB (Eurodollar convertible bond), floated by Taiwanese enterprises abroad, in Taiwan for trading and issuance of renminbi-denominated bonds on the island. The move, which will help enterprises raise funds and increase business opportunities for securities firms, will be announced by the end of the month, at the earliest.
The simultaneous listing of ECB in Taiwan will enable enterprises to raise funds not only on the primary market but also the secondary market, thereby boosting the liquidity of the bond and its attractiveness to investors. Many securities firms and banks are gearing up to tap the new business opportunity.
The liberalization measures are meant to revitalize the international-board bond market, which has become stagnant following six bond issuances two years ago. Recently, BNP Paribas plans to float one issuance. The FSC has decided to revitalize the international-board bond market, along with the development of financial businesses with cross-Taiwan Strait characteristic and the establishment of cross-Strait currency clearance mechanism.
In addition to ECB, renminbi-denominated bonds floated by domestic enterprises in Hong Kong (known as dim sum bond) will also be allowed to be listed in Taiwan for trading.
The FSC noted that presently, ECB floated by domestic enterprises can be listed in Taiwan one month after issuance. Since the issuing enterprises may have raised sufficient funds on the primary market during the one-month period, they need not return to the secondary market of the GreTai Securities Market for fund raising. Therefore, there is no ECB listed on the GreTai Securities Market now. Meanwhile, common corporate bonds floated by domestic enterprises cannot be listed in Taiwan at present.
The FSC and GreTai Securities Market has planned to remove the one-month restriction for listing of ECB and will also permit common corporate bonds floated by domestic enterprises abroad to be listed in Taiwan.
(by Philip Liu)
