11.15.2001
Legislature ratifies raise on foreign telecom ownership

• The Executive Yuan ratified the raising of the ceiling on foreign direct holdings in private telecom operators to 49% from 20%. The limit on indirect holdings remains at 60%. The new law still needs to be reviewed by the Legislative Yuan at a later date. The gov't is also going to raise the foreign ownership ceiling for gov't-owned operator Chunghwa Telecom (2412 TT). We see this move as a catalyst for telecom shares as overseas direct holdings are already pushing the former limit (18.5% for TCC and 16% for Far EasTone). Foreign investors are likely to be attracted by strong earnings and low PERs on Taiwan's telecom plays.