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TWSE caps year in review with upbeat outlook ahead

TAIPEI, Taiwan -- The Taiwan Stock Exchange (TWSE, 證交所) yesterday provided a retrospective on the market in 2013, outlining numerous improvements in performance after investors accumulated profits of NT$766.1 billion over the course of last year.

According to TWSE Chairman Lee Sush-der (李述德), of the NT$766.1 billion in portfolio profits earned by investors, about NT$650 billion was paid out in cash dividends distributed by high-performing companies, which significantly exceeded the 1-percent average return rate of savings deposits. With dividend returns averaging 3.3 percent, last year's market proved to be an ideal avenue for investments, Lee said. Among various sectors, 406 enterprises provided dividend returns of 3 percent, representing nearly half of Taiwan's 838 listed companies, Lee added, who also stated that a number of companies with especially stellar operating results last year provided dividend return rates greater than 10 percent.

Companies across the industry spectrum recorded a reasonable average price-to-earnings ratio last year, with enterprises recording on average a 52.5-percent year-on-year growth in after-tax net income results. With price-to-earnings ratios averaging between 17 to 24, the Taiwanese market last year wrapped up in a reasonable position, Lee said. In relation to the 7-to-14 range of the China, South Korea, Hong Kong, Shanghai and Singapore markets, and the 22-to-28 band seen in the Tokyo and Shenzhen markets, the Taiwanese market last year concluded within the range of reasonable expectations, said Lee.

2013 saw the listing of 32 new companies, among which 22 are local and 10 are foreign, an improvement from the 22 new listings recorded in 2012, the TWSE said. Companies last year raised about NT$161.5 billion from initiating initial public offerings (IPO) and capital increase by cash, a vast 70-percent improvement over the NT$96 billion recorded in 2012, according to the TWSE.

Trading on the Taiwanese market also remained brisk throughout last year, with daily volumes averaging NT$77 billion, maintaining a spot in the higher percentiles among markets worldwide.

2014 Outlook

The TWSE yesterday stated that improving liquidity and transparency as well as revitalizing activity through further deregulation and easing of policies are future goals. In addition to several measures enacted by the Financial Supervisory Commission (金管會), including approval for investors to place short orders when a stock is trading below its opening price of the day, permission for dealers to place buy or sell orders on stocks that have reached their intraday movement limit of above or below 7 percent of the opening price, beginning on Jan. 6, traders will be able to conduct day trading with less restrictions. The TWSE stated that its duty is to simplify and expand the rules of the investment game, and enable trading mechanisms to meet the requirements of supply and demand, producing a sound investment environment that is more resistant to the influences of manipulation and speculation.

Over the course of the new year, several new investment instruments and avenues will be introduced to the public, including a offshore renminbi clearing center, new exchange traded funds (ETF) offered by Renminbi Qualified Foreign Institutional Investors (RQFII), and futures-based gold ETFs, in an effort to match the array of investment opportunities seen in other regional financial hubs such as Japan, South Korea, Hong Kong, and Singapore, said the TWSE.

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