The Financial Supervisory Commission (FSC) is looking into the possibility of allowing Taiwanese investors to join a pilot program that will connect to the Shanghai and Hong Kong stock markets.
The FSC made the comment on Monday in response to investors’ concerns that the new system, the Shanghai-Hong Kong Stock Connect, will impact Taiwan’s stock market when it is launched in October.
Under the program, investors from Mainland China and Hong Kong will be allowed to trade on each other’s market. The Taiwan Securities Association is urging the FSC to work out a similar Taiwan-Shanghai-Hong Kong stock Connect deal.
FSC Chairman William Tseng said that the commission will evaluate the possibility once it receives the association’s proposal.
“The Taiwan Securities Association’s proposal will be reviewed once it is delivered to the FSC" said Tseng. "We will also discuss this issue with other government agencies. The association said that the Shanghai-Hong Kong Stock Connect will be launched soon and it’s suggesting that the FSC should allow professional investors in Taiwan to buy Chinese stocks through this new program. The FSC will conduct a more comprehensive review of their proposal.”
Tseng said that every capital market has its strengths and weaknesses, and Taiwan’s strengths are that our price earnings and turnover ratio are high, and the fundamentals of the public listed companies are healthy.
Tseng said that he believes international funds will take these strengths into account when they allocate their capital in different Asian markets, and that he’s very confident about Taiwan’s capital market.