Discussion of Selecting the Appropriate Capital Market for Public Offering of Taiwanese Corporations
|關鍵字:||籌資;上市地點;掛牌;台資企業;fund raising;public offering location;public offering;capital market|
Taiwan corporates in their start-up stage use company's own equity for the initial setups and for operation capital. As the company grow, Management needs to begin to think about the long-term planning for the next five to ten years. It needs to consider things such as factory expansion, additional production capacity, integration, whether it be horizontal, vertical or conglomerate, and maybe even talent hunting, all for the purpose of maintaining competitive and as a going-concern. These expenditures are known as capital expenditures (CAPEX), and having sufficient fuding is vital. Corporations, for its growth needs and to maximize shareholder's equity, must seek an appropriate market to go public in order to maximize the capitals to-be raised. Corporations in Taiwan experienced the rapid growth of the stock market in the early stage and many seek other markets such as Hong Kong and Singapore in the later stage. Up until 2009, with the political environment of Taiwan stablizing, many Taiwanese corporations turn its focus back to home. In the past, the legal environment, poor perrformance of the stock market, low international exposure, and slow growing economy made the home market less preferable for Taiwanese companies to offer their companies public. Many Taiwanese corporations may choose Hong Kong, Singapore or even the United States over its home market. The focus of this paper is to discuss the factors affecting Taiwanese corporations in the selection of capital market for their public offerings. The markets under discussion include Taiwan, Hong Kong, Shenzhen and Shanghai. The choice of available market for corporations who wish to take their company public is abundant. Not only can they choose between Taiwan, Hong Kong, Shenzhen and Shanghai, they can go for a second round public offering in any market among the four, except where they had their initial public offering. If the company had their initial public offering in Hong Kong, it can choose between Taiwan, Shenzhen and Shanghai to have a second round public offering. In the future, when Hong Kong and China become available for foreign companies to issue Depository Receipt (DR), Taiwanese corporations can issue DR in China and Hong Kong. And public companies in Hong Kong and China can issue Taiwan Depository Receipt in Taiwan. Taiwanese companies need to consider the purpose of going public, capital market's industry preference, historical successful cases of similar industry, and structure when determining the appropriate capital market to offer itself to the public. Time and cost are other factors that also need to be included in the decision making. Captial raising is a long-term plan. Companies can first fulfill the public offering capital structure requirement of the four markets then assess the market condition for the most appropriate market to offer itself to the public in order to maximiaze the benefits for the corporation.
|Appears in Collections:||Thesis|