Election optimism boosts Taiwan fund raising

By Faith Hung

TAIPEI, Feb 29 (Reuters) - The Taiwan dollar's month-long
surge amid a rush of foreign money into local stocks is breathing
new life into Taiwan's capital raising-market and boosting new
stock offerings to their highest level in five years.

The Taiwan dollar TWD=TP rose to its highest in nearly
three years on Friday, thanks to strong foreign fund inflows. The
currency is up 4.5 percent in February alone and is firming
towards a 7-1/2-year high ([ID:nTPF000689]).

The rally, fuelled party by broader investor optimism of
better ties with China after presidential elections in March, has
helped Taiwan's main stock index .TWII rise 12 percent this
month, spuring companies to list their stocks there.

"We have seen lots of Taiwan manufacturers operating in China
coming back to Taiwan for IPOs this year, a sharp contrast from
last year, when many of them sought to raise funds in Hong Kong
or Singapore," president Su Song-chin of the Taiwan Stock
Exchange (TSE) told Reuters.

"We are raising the IPO target for the TSE to 40 in 2008 from
30 originally," he said, adding IPOs totalled 30 last year.
Already 11 companies are lined up to list in Taiwan this year.
(For diary of Taiwan's IPOs, click [ID:nTP22881])

Only 3 percent of investors who recently subscribed to Gamma
Optical's (3557.TW) new share offering were able to buy the
shares, indicating stronger demand for IPOs, Su said.

Just two months ago, three companies, including Green Energy
Tech (3519.TW) and Goodway Machine (1583.TW), had put off their
IPO plans to this year, after Taiwan stocks tumbled amid concerns
of political uncertainty and technology exports to the U.S.
market would slow due to the subprime turmoil.

Taiwan, among Asia's top-performing markets this year, will
likely extend its momentum in IPOs and acquisitions, in part
because domestic companies have been undervalued relative to many
of their Asian peers.

"Taiwan stocks have underperformed too much in the region
over the last few years," said Gary Kuo, chairman of Morgan
Stanley (MS.N) Taiwan.

"We don't rule out the possibility of having many
acquisitions worth $300 million to $700 million each in the high
tech industry over the next two to three years," Kuo said.

Chairman Y.T. Du of Citi Global Markets agrees.

"This is going to be an exciting year for M&A and fund
raising activities," Du told reporters.
($1=T$30.7)
(Editing by Doug Young)