A new stock index tracking the performance of Taiwan’s securities markets was launched May 5 in Taipei City, underscoring ROC government efforts to bring local capital markets more in line with international standards.
Formosa Stock Index, a joint initiative of Taiwan Stock Exchange Corp. and GreTai Securities Market, enables investors to monitor the country’s main bourse and over-the-counter market.
Comprising 1,487 stocks from TWSE and GreTai, the index is calculated on component prices at the end of 2013, with a base level of 10,000 points. The benchmark closed at 10,373.48 on its first day of trading.
Financial Supervisory Commission Minister Tseng Ming-chung said the index is a milestone in the development of Taiwan’s financial sector. By providing a comprehensive picture of Taiwan’s trading environment, FSI allows investors from home and abroad to make better decisions, he added.
The index is Taiwan’s response to the emergence and growing popularity of similar initiatives such as JPX-Nikkei Index 400 in Japan. Launched in January, JPX-Nikkei Index 400 has made strong headway in promoting the international investment appeal of Japanese corporations.
TWSE Chairman Lee Sush-der believes that FSI will follow in the footsteps of its Japanese counterpart.
The index is expected to serve as an effective tool for marketing Taiwan’s stock markets to the world, he said, adding that it can help expand the local capital market by spurring creation of more financial products and services.
Echoing Lee’s remarks, GreTai Chairman Wu Sou-shan said FSI is the first cross-market index in Asia providing full coverage of the bourses it is designed to track. On the back of this exposure, it is hoped more foreign investors will use GreTai’s trading system, he added.
According to TWSE, it will continue working with GreTai to develop additional cross-index orientated services catering to the specific needs of investors. (SFC-JSM)
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