Profitability of publicly traded firms grows in 2014
Companies listed on the Taiwan Stock Exchange Corporation ( TSEC) grew 5.42 percent in terms of revenues for 2014, while firms listed over the counter ( OTC) grew 6.92 percent, according to a report released by the Financial Supervisory Commission ( FSC). TSEC- listed companies raked in NT$ 28.333 trillion in 2014, which represented a 5.42- per- cent growth year- on- year. Earnings before tax also surged 15.57 percent.
Corporate revenues and profits grew largely because of a booming semiconductor industry and its related applications, which then fueled electronics parts and components production, said the FSC’s report.
In addition, local finance and insurance companies reaped higher profits as rallying stock markets overseas offered greater return on investment.
While semiconductor, electronics and finance industries prospered, trade of general merchandise and the plastic industry saw substantial decline last year.
OTC- Listed Companies
OTC- listed companies drew in NT$ 1.8936 trillion in 2014, representing a 6.92- percent annual growth. The companies’ earnings before tax, on the other hand, soared 29.48 percent.
The FSC attributed the rise to a strong semiconductor demand, a solar industry that is edging toward its high season, and higher backlight module and battery module shipments.
According to the FSC, the semiconductor, optoelectronics, and computer industries saw the highest earnings last year, while the chemical, biomedicine and construction material industries
saw more setback.
TWSE Chairman Weighs in
The government is set to loosen the stock price fluctuation cap in June, from 7 percent to 10 percent in a given trading day. The new policy is expected to hike up trading volume.
TWSE Chairman Lee Sush-der ( ) said most overseas stock markets are already permitted to see 10-percent or higher stock fluctuation. Taiwan should not miss this trend, Lee said.
Although the local stock market has seen great structural change in the past two years, trading volume as well as prices still lags behind those in Hong Kong and Shanghai markets, said the TWSE chief.
According to Lee, trade volumes fell in the last couple of years, and he attributed the phenomenon to local unfavorable tax rules and more internationalized foreign exchanges that lured Taiwan’s capital away. Lee said local trading in 2014 dropped 26 percent from that in 2009.
The number of TWSE- and OTClisted companies combined has reached more than 1,700, while the number of unlisted companies is 1.3 million or so.
Effective corporate governance, their emphasis on social responsibility and conversion with investor public, and a transparent stock exchange platform, are among the key factors to connect players in a supply chain and to enable economic growth, said Lee.