Full Delivery Shares

What Are Full Delivery Shares?

Full delivery share is a rating given to stocks on the Taiwan Stock Exchange. These stocks have a per-share book value below the exchange's required least of five New Taiwan dollars (TWD). Likewise, these illiquid shares are excluded from the Taiwan Stock Exchange Corporation weighted index.

Full delivery shares are all the more usually called full delivery stock or full delivery securities.

Seeing Full Delivery Shares

Full delivery shares address a financially striving company and have limited liquidity. Investors must pay in advance and in-full for these trades. Under existing securities trading regulations, edges are not permitted on full delivery shares. Due to the striving company behind the shares, full delivery shares are a risky investment. The companies they address might have no income or assets, and may even be in or close to bankruptcy. Notwithstanding, a few investors can handle the risk, and bringing in money on them is conceivable. In the United States, such low-valued stocks are traded in over-the-counter or unlisted markets.

Foreign Investment in Taiwanese Full Delivery Shares

Foreign investors are not permitted to acquire financing in New Taiwan Dollars, with the sole exception of full delivery, special treatment, and warning stocks. Since July 23, 2004, Taiwanese financial institutions have been permitted to give intra-day TWD financing to foreign investors to cover inadequate funds for settlement due to time region differences. Set-up and pre-delivery of cash to a broker is required before trading.

In such a transaction, the custodian banks may, in the wake of booking foreign exchange by a foreign investor, payout TWD for the foreign investor during the trading day Taiwan time, and afterward receive the foreign currency payment on the trading day in the evening.

Illustration of Full Delivery Shares

In November 2016, after two lethal accidents in no less than seven months of one another, TransAsia Airways was downgraded to full delivery stock. TransAsis was the principal listed company on Taiwan's primary stock exchange to close down in the midst of unreasonable heavy losses. The Taiwan Stock Exchange justified assigning TransAsia's shares as a full delivery stock in light of the fact that the closure of a listed company was probably going to unfavorably affect shareholder equity and could impact the exchange's weighted index.

On account of TransAsia, shares fell 7.14% on November 21, 2016, and trading of the stock was suspended for one day while investors sat tight for a decision on the company's destiny. After TransAsia announced, it would quickly cease operations and break up the shares were set into full delivery share category while trading continued the next day. As a full delivery stock, TransAsia shares kept on plunging by the maximum daily decline of 10%. In the wake of experiencing further losses, TransAsia was delisted from the market after it held a special meeting for shareholders on January 11, 2017.

Features

• Foreign investors can get financing in New Taiwan Dollars to cover lacking funds for settlement in Full Delivery Shares.
• Full delivery shares are shares with a per-share book value below five New Taiwan dollars (TWD).
• They have limited liquidity and investors must pay in advance for the shares.