The Taiwan Monthly

Jul. 2024

Important Announcement

Taiwan's Market Power-Up: TWSE’s Three Strategies for Enhancing Taiwan's Capital Market Value for Global Competitiveness

With over 60 years of operational experience, the TWSE ushers the capital market into a new era. Under continuous refinement of market mechanisms, Taiwan's stock market liquidity has steadily improved. This year, TAIEX has surpassed 23,000 points, with daily averages trading volume exceeding NT$400 billion, ranking 9th globally in trading volume. This milestone is rooted in the strong fundamentals of Taiwan's listed companies and the steady advancement in ESG performance, achieved through collaboration among listed companies, investors, and the TWSE. Strong performances in both price and trading volume, along with steady growth in the number of listed companies and investor participation, underscores the Taiwan Stock Exchange's increasing responsibilities.

 

In a press conference to mark the beginning of 2024, the TWSE announced that one of its key focuses is “Market Expansion for Enhanced Market Value.” On June 24, the TWSE held a press conference to introduce the various initiatives under this program. TWSE Chairman Sherman Lin stated that the TWSE’s priority is on fully exploring current opportunities by leveraging its capital market platform to guide companies in developing global perspectives and creating further value. The TWSE also fosters dialogue between enterprises and investors, thereby leveling up companies to the international stage. By highlighting the competitiveness of our enterprises and industries, the TWSE aims to bolster capital attraction and parlay our market’s growth momentum into prominent standing among the world’s top stock markets.

 

With a complete technology industry supply chain and a pivotal role in advancing international technologies, the TWSE encourages all industries to prioritize innovation. By leveraging Taiwan's existing technological ecosystem advantages, companies can enhance operational efficiency. This strategic approach aligns with global trends, boosting corporate competitiveness and value, thereby propelling Taiwan's capital market into the next era. This project aims to enhance capital market value through the three main strategies of Enhance Corporate Value, Lead Industry Development on the TWSE platform, and Increase Corporate Exposure through enhanced investor communication. These efforts are crucial in promoting the healthy development of Taiwan's capital market.

 

The first strategy is Enhance Corporate Value. The TWSE encourages companies to internalize shareholder value as part of their corporate DNA by adding a section on enhancing corporate value in the amendment of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.” Companies are also urged to set up a dedicated webpage for disclosing shareholder value feedback and key financial indicators. Furthermore, the TWSE will integrate price-to-book ratio incentives into market making measures.

 

Meanwhile, the TWSE has continued to evolve its corporate governance blueprint, transitioning to the Sustainable Development Roadmap in 2020. All listed companies are required to prepare sustainability reports by 2025, undergo ESG evaluation (currently known as the Corporate Governance Evaluation) by 2026, and complete greenhouse gas inventories by 2027 and verification by 2029, thereby enhancing corporate governance and sustainability disclosure to promote awareness of corporate responsibility towards sustainability.

 

The second strategy seeks to Lead Industry Development through the TWSE platform. To guide diversified industry development, the TWSE aims to enhance capital market fundraising platforms, focusing on new economy sectors (green energy, digital, and biotechnology) through the dual engines of the General Board and the Taiwan Innovation Board, targeting IPOs to account for 50% of listings by 2024. We are collaborating with public sectors and startup ecosystem resources to pool nationwide resources to facilitate industry transformation and upgrade, enhancing Taiwan's position in the new economy.

 

To expand industry chain cooperation opportunities and maximize synergies between enterprises of various scales, the TWSE will organize a Taiwan Power-up Summit for high-market-value and profitable listed companies to share their experiences on innovation and sustainability issues. The fostering of cross-industry exchanges is sure to create and nurture exciting new opportunities. The TWSE also plans to conduct thematic exchanges for digital, green energy, and biotechnology sectors as well as large-scale "New Economy Industry Linkage Symposiums" in 2024 that will bring together industry stakeholders, ecosystems, venture capital, IPO intermediaries, and more to accelerate startup growth and enhance fundraising opportunities in innovative industries.

 

The third strategy aims to Increase Corporate Exposure. One specific approach is the joint establishment of the IR ESG Engagement Platform with Taiwan Index Plus Corporation (TIP) to support institutional investors with ESG engagement information, provide engagement and matchmaking services to link up SMEs with institutional investors, and cultivate deeper investor relations. The TWSE will also collaborate with international index companies and databases to develop Taiwan ESG indices and shine a spotlight on our outstanding companies. Furthermore, we encourage companies with market capitalization of over NTD10 billion to hold investor conferences at least twice a year, with the long-term goal of requiring all listed companies to hold two investor conferences a year, in order to better communicate with investors.

 

The TWSE continues to use a dual-track model to attract capital from new regions and through diverse channels. In 2024, in addition to conducting roadshows in Europe and Singapore, we collaborated with HSBC Securities (Hong Kong) to host Taipei's first physical conference. Plans for the latter half of the year include expanding into the Middle East for capital inflows and hosting another major conference in Taipei, further showcasing the TWSE's international brand strength.

 

To provide user-friendly access to investors, the TWSE established an IPO Information Hub and expanded ESG database content in 2024. We aim to enhance investor satisfaction by improving information disclosure channels and optimizing user interfaces. The TWSE is keenly aware of the importance of aligning ourselves with the international community, and starting in 2024, we will lead Asia's capital markets in full information disclosure in English, including material information, annual financial reports, and annual reports. In the future, we will continue to improve the quality of English information disclosure.

 

Looking ahead to the future, the TWSE aims to become an international capital market, balancing safety with development. We will continue to guide enterprises in enhancing governance capabilities, encourage technological leadership for innovative development, emphasize collaboration among industries, and improve communication with market participants. Our goal is to achieve the growth and value enhancement of Taiwan's capital market. The TWSE actively innovates to strengthen overall market resilience, responding to digital and net-zero transformations, seeking new generation growth momentum, and creating a more resilient and innovative capital market together with market participants.