After three years of discussion, Chunghwa Telecom's ADRs were successfully listed in New York on July 17th (July 18th in Taipei). On the day the shares were listed in New York, Chunghwa Telecom's ADRs gained US$0.11 per share, while time shares sold in Taiwan also rose NT$1.5.
The three firms underwriting Chunghwa's ADRs were the US companies Goldman Sachs and Merrill Lynch, as well as the Swiss Bank Corp. The general manager of the Goldman Sachs office in Taiwan, David Chang, notes that the scale of Chunghwa Telecom's simultaneous domestic and overseas stock release is significant-possibly the world's largest listing for this year. In the past when the Ministry of Transportation and Communications auctioned government shares of Chunghwa Telecom, says Chang, no one would even inquire about it. This time the entire offering unexpectedly sold out, which shows that the Chunghwa Telecom stock release allowed local as well as overseas investors to enjoy the same opportunities and investment costs. This helped create market demand and had the benefit of reducing the discount.
Chunghwa Telecom has a total of 9.64 billion outstanding shares. The company's first release of shares occurred in August 2000, when 2.14% of its total shares were sold through public bidding. In September of that year and January of the next, Chunghwa released a total of 2.08% of its shares through public tender and employee stock options. For the entire year of 2001 the company released 1.08% of its shares through after-market auction and employee stock options. In 2002 Chunghwa released its greatest percentage of stock to date, a total of 13.91% with a value of about NT$67.1 billion.
The Ministry of Transportation and Communications says that at this rate Chunghwa will reach its goal of privatization by the end of the year.
An editorial in the Economic Daily News points out that as stock markets slowly recover around the world, Taiwanese enterprises have actively set their sights on European and US markets, and are issuing depository receipts, global convertible bonds, and using other methods to raise capital. A number of recent overseas offerings by Taiwanese companies have attracted the close attention of international investors. These include: a recent issue of Hon Hai Precision convertible bonds, which sold at a premium; the lower-than-expected discount for the First Financial Holding Co.'s global depository receipts; and Chunghwa Telecom's ADR listing in New York, which constituted this year's largest IPO in the US. These developments show that the bottom-line achievements of Taiwan enterprises are winning international recognition.
The amount of capital raised in international markets by Taiwan's public companies has already exceeded US$7.2 billion. Among all Asian countries Taiwan's firms are the most active in raising capital. In addition, overseas players are large net investors in the Taiwan stock market. This is due in part to growing optimism as the world's stock markets emerge from the shadow of three bad years, and in part to the fact that foreign investors are looking positively at the prospects of Taiwan's economy. This mood bodes well for the ability of Taiwan enterprises to raise overseas capital, and is of even greater benefit to the upgrading and transformation of domestic industries.
