The Impact of the Currency Clearing MOU on the Stock Price of the Banking Industry with China Branch

• Main Authors: Chia-YuCheng, 鄭佳瑜
• Other Authors: Hsin-Hong Kang
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/58464106588198737544

碩士 === 國立成功大學 === 企業管理學系碩博士班 === 101 === With more and more frequent cross-strait economic and trade activities, Taiwan dollar (TWD) business in China and Renminbi (RMB) business in Taiwan have been recently launched in response to meet the urgent demand for trade and investment. Moreover, Taiwan and China signed the Memorandum of Understanding (MOU) on Cross-strait Currency Clearance and Settlement in August 31, 2012. The study aimed to investigate whether the MOU on currency clearing would influence on stock prices of those Taiwan banks which had China branches. The research set out from the literature review, formed two hypotheses, established the regression model, and tested the by the statistical software E-views. The empirical results showed that signing the MOU on Cross-strait Currency Clearance and Settlement had positive influence on stock prices of those Taiwan banks with China branches. Furthermore, after regression analysis of the selected profitable items in those companies’ financial statements like return on assets, return on equity, earnings per share, earnings ratio, and price to book ratio, the results indicated that the return on equity and stock prices had a significant positive relation.