China &Taiwan Allow Co-owned Companies With Investors From Both Countries To List On Both Stock Exchanges

China and Taiwan have been at daggers-drawn for more than half a century.

The two states cut ties after the Communists drove the Nationalist Party government out of China in a bloody civil war.

But things are changing fast…

And this could open up big profit opportunities for savvy investors. In March, Taiwan elected a president who wants closer ties with China.

Then, in April Taiwan’s vice-president visited the mainland. And he held talks with Chinese president Hu Jintao.

That was the highest-level contact between the two sides in sixty years.

And just last week Taiwan’s financial regulators made a critical announcement...

They will allow companies co-owned by Chinese investors to dual-list on its stock exchanges.

This is exciting news. Because some of the most dynamic Chinese companies could soon list in Taiwan…

There could be a big profit opportunity here. If we can get in before Taiwanese investors start piling in…

Let me just explain...

Taiwan and mainland China have been separated since 1949. That year, Chairman Mao’s Communist forces drove the Nationalist government of Chiang Kai Shek off the mainland. With US backing, the Nationalists established a separate government on the island of Taiwan.

From here they continued to claim to be the legitimate government of all China. And while the mainland suffocated under Mao’s rule, Taiwan developed into one of the original Asian Tiger economies.

The country is an export powerhouse. And it runs a big trade surplus. It’s foreign reserves are among the biggest in the world.

There has been very little political contact between Taiwan and the mainland since the civil war. But economic ties have boomed.

China is Taiwan's biggest export market. And its second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwanese investors were among the first to start investing in China when the country started to open-up in the 1980’s. Taiwanese capital has been a critical part of powering China’s economic rise…

But there were no formal ties between the two states. So a lot of that investment has had to be routed through third countries – often Hong Kong. And Taiwan’s private investors weren’t able to profit from that investment fully. Because the government imposed capital controls that limited locally-traded companies. They were not allowed to invest more than sixty percent of their capital in China. So Taiwanese companies that wanted to invest heavily in China incorporated abroad. And they listed abroad.

Now, some seventeen companies already seem interested in listing in Taiwan. And some of these like Foxconn Technology and Delta Networks are global players. But this could just be the start. Up to 400 China-based Taiwanese companies could list in Taiwan if the capital controls are lifted.

Many of these are going to be duds…

Don’t get me wrong though. I don’t for one moment suggest that these companies’ shares are going to soar just because they list in Taiwan. Most of these firms will never make the Profit Hunter short list.

What I am saying is that after the falls in Asian markets that we have seen since the beginning of this year there are some fantastic investment opportunities out there. That includes some of these China-based companies that want to list in Taiwan.

As a whole new group of investors starts to pour money into them, we could see a sharp rebound in their share price. The trick to profiting from this is to identify the companies that look set to spark Taiwanese investor’s interest.

It’s still early days on this. And we haven’t got a concrete investment on this – yet. But this another investment opportunity developing on the other side of the world that still hasn’t been picked-up on by the mainstream media

Taiwan is one of the great overlooked stories of East Asia. It doesn’t get the kind of attention that Hong Kong does. But we are going to be watching it very closely.

I’ll keep you posted.

China seems to hog all the attention in Asia these days. But there are other brilliant opportunities in the region that are still overlooked by mainstream investors. One of them is the little country that has been dubbed the “Emerging China”. I’m talking about Vietnam.

This is probably most exciting growth story in Asia. And I have written a short report telling my readers why I think its such a brilliant investment opportunity. You can take a look at that HERE

Regards,

Manraaj Singh
Editor
Profit Hunter P.S. If you enjoyed this article then we encourage you to sign up for Profit Hunter. Track down exciting opportunities in the worlds’ emerging markets and always stay ahead of the curve.

^ Back to top

BlinkList
Del.icio.us
Digg
Facebook
Google Bookmarks
Livejournal
Newsvine
Reddit
StumbleUpon
Yahoo! My Web

China &Taiwan Allow Co-owned Companies With Investors From Both Countries To List On Both Stock Exchanges

RELATED ARTICLES

PROFIT HUNTER

FLEET STREET LETTER

ZURICH CLUB

China And Taiwan Kiss And Make Up. We Smell A Profit Opportunity