Taiwan and South Korea launched mutual listings of exchange traded funds (ETFs) in each other's stock market on Friday, a sign of closer business ties between the two countries as Taiwan seeks to boost the global visibility of its equity market.
The Yuanta KOSPI 200 ETF issued by Taipei-based Yuanta Securities Investment Trust Co. opened for trading on the Taiwan Stock Exchange (TWSE) while he Tiger Taiwan TAIEX (H) ETF issued by Mirae Asset Global Investments was launched on the Korea Exchange (KRX) in Seoul.
The TWSE said the mutual ETF listings represented a new milestone in Taiwan and South Korea's capital markets.
The mutual ETF listings came less than a year after the TWSE and the KRX signed a memorandum of understanding on future cooperation in December 2015.
Addressing a ceremony in Taipei for the Yuanta KOSPI 200 ETF, TWSE Chairman Shih Jun-ji (???) said the exchange has worked hard to form strategic partnerships with foreign counterparts, and the listing of ETFs overseas tracking Taiwan stocks reflected those efforts.
Shih said international cooperation will no doubt strengthen the TWSE and help the exchange become more globally competitive.
TWSE President Lee Chi-hsien (???) led a delegation to Seoul to attend the ceremony for the listing of the Tiger Taiwan TAIEX (H) ETF, and Lee exchanged views with KRX CEO Jeong Chanwoo on cooperation between the two markets.
The Yuanta KOSPI 200 ETF tracks the KOSPI 200 Index, which is comprised of 200 large-cap stocks listed on the KRX that account for about 90 percent of the market's capitalization and serves as the benchmark index for Korean stocks.
As of the end of September, the KOSPI 200 Index had risen 7.12 percent so far this year.
The Tiger Taiwan TAIEX (H) ETF tracks the Taiwan Stock Exchange Capitalization Weighted Stock Index (Taiex), the benchmark index for Taiwan's main stock market. The Taiex was up 9.94 percent year-to-date as of the end of September.
The Yuanta KOSPI 200 ETF is the first ETF in Taiwan to track Korean equities. Taiwan had previously listed seven ETFs tracking equities in other markets like Japan, Hong Kong, China and the United States. Among these ETFs are the Fubon TOPIX ETF, the Yuanta Nikkei 225 ETF, the Cathay Nikkei 225 Currency-hedged ETF, the Fuh Hwa Hang Seng ETF, the Cathay FTSE China A50 ETF, and the Fubon Nasdaq-100 ETF.
ETFs have been gaining popularity in the Taiwan stock market as the TWSE has diversified its ETF portfolio and promoted the products.
According to the TWSE, 310,000 retail investors and more than 3,500 institutional investors now participate in ETF trading in Taiwan, up 28 percent and 52 percent, respectively, from 2003 when TWSE launched its first ETF, indicating a rise in enthusiasm for the investment vehicle.
Source: Focus Taiwan News Channel