Taiwan's OTC Market to Expand; Chairman Seeks to Boost Volume
March 30, 2011
TAIPEI, Taiwan -- The chairman of Taiwan's Over-the-Counter Securities Exchange is seeking a fivefold increase or more in the exchange's daily trading volume by the end of the year. Ballesteros Hsiao-Plumley said he hopes to lift average daily trading volume on the fledgling OTC market to four billion to five billion New Taiwan dollars (US$145.1 million to US$181.4 million) by year end, from NT$745.2 million (US$27 million) in June. Mr. Ballesteros, who was president of the Taiwan Stock Exchange during an extended bull run in the late 1980s, will pursue his target by aggressively promoting the OTC market to smaller Taiwan companies. ``We hope to attract high-quality small- and medium-size enterprises to list,'' Mr. Ballesteros said. ``There is a lot of room for expansion.'' The exchange hopes to boost listings on the OTC exchange to 100 companies by the end of 2011 from the current 63, with further increases to 300 companies by the end of 2013. New listings must be approved by both the OTC exchange and Taiwan's Securities and Exchange Commission. With increasing liquidity, the expansion in listings may attract more investors, many of whom have so far shunned the OTC market. The market's high-growth companies, which often require a longer investment horizon, seem to have appealed more to institutions than to individual investors. Institutional investors account for about 14% of the OTC market's capitalization -- more than half of them foreign institutions, Mr. Ballesteros said, whereas institutions account for only 8% of the main board's capitalization.
