Abundant Capital Funds
- Mature and active securities and stock exchange market.
- Stable exchange rate and fair capital fund costs and interest rates compared with other Asian countries.
- Financial reporting standards gradually converging to the International Financial Reporting Standards (IFRS)
The Taiwan society has abundant capital funds. In 2013, the personal savings rate reached 29.12% and the excess savings account for 10.40%. As the end of 2013, the production value of the financial services industry accounted for about 15.27% of the GDP. It is evident that the development of Taiwan financial market has become mature. Meanwhile, Taiwan's holding of foreign financial assets had reached USD877.8 billion, which hit a record high. Taiwan's banking system has deposit of NT$27.1 trillion.
Compared to the neighboring countries, Taiwan's securities and stock exchange market is mature and active. At the end of 2011, there are 790 listed companies on the Taiwan Stock Exchange. The total market capitalization on the TWSE amounted to NT$19,216 billion and the ratio of Taiwan market capitalization to GDP was139.68%, with the total trading value in the same year being at NT$26,197 billion, which represents a market turnover rate of 119.87% and the Taiwan market P/E ratio at 15.76.
Taiwan's exchange rate is stable, the capital fund costs and interest rates are lower than other Asian countries. The cost for listing in Taiwan's stock market is about NT$ 10 million, which is lower than Hong Kong and Singapore and an advantageous factor to attract foreign investment in the capital market. The ratio of foreign investment to Taiwan's capital market has reached a certain level. As of end of 2011, the accumulated inward remittance of foreign investment in Taiwan's stock market had reached USD 124.7 billion. The foreign holding of Taiwan's listed companies accounted for nearly one third of the total market value.
In addition, Taiwan's financial reporting standards will gradually converge to the International Financial Reporting Standards (IFRS), which are principle-based. Such convergence requires no exception, least regulations and professional judgments. Conformity to international standards will increase the transparency in financial reporting, reduce capital fund costs, and save costs for redoing financial reports. Moreover, compared to mainland China and Hong Kong stock markets, Taiwan has higher quality research professionals and higher level of protection for intellectual property rights, and is more reliable than Hong Kong in the evaluation of technology companies.
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