Taipei--Taiwan and South Korea are planning to compile cross-border indexes, which will bring market heavyweights in both countries into a single index, according to the Taiwan Stock Exchange (TWSE).
In addition, the TWSE and the Korea Exchange (KRX) are also aiming to jointly unveil exchange traded funds (ETFs) in the third quarter of this year, the TWSE said.
When that happens, investors in Taipei and Seoul will be able to track Taiwan Semiconductor Manufacturing Co. (???) and Samsung Electronics Co. simultaneously, as long as they buy into the jointly unveiled ETFs, the TWSE said.
The plans to jointly compile cross border indexes and launch ETFs in Taiwan and South Korea were made through cooperative efforts by the TWSE and KRX to forge closer ties, when KRX Chairman Jeong Chan Woo visited the Taiwanese exchange earlier this week.
During his visit, Jeong held discussions with TWSE Chairman Shih Jun-ji (???) on a wide range of issues, including how to compile and maintain indexes jointly, how to promote ETF trading and how to jointly market their financial products.
According to the TWSE, Taiwan Index Plus Corp. (??????), a 100 percent TWSE owned index provider, will work with the KRX to compile three indexes -- the IT sector index (ITI), the Dividend Theme Index (DTI) and the Representative index (RPI).
The ITI and DTI are set to be launched in the third quarter, according to the TWSE.
Shih said Taiwan and South Korea have similarities in terms of social, economic and cultural development and have built an overlapping industrial structure that features information technology development and a great pool of IT talent.
Under such circumstances, Shih said, it will make sense for Taiwan and South Korea to compile cross border indexes.
After the launch of the indexes, ETFs will be introduced to track them, helping investors to build more international portfolios, he said.
The TWSE and KRX signed their second memorandum of understanding on cooperation in December 2015 and launched mutual listings of their ETFs in October 2016.
The Tiger Taiwan TAIEX (H) ETF, issued by South Korea's Mirae Asset Global Investments, ranks among the top 20 actively traded ETFs in Seoul. The ETF tracks the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX), the benchmark index for Taiwan's main stock market.
Taiwan's Yuanta Securities Investment Trust Co. launched the Yuanta KOSPI 200 ETF in Taipei to track the KOSPI 200 Index, which comprises of 200 large-cap stocks on the KRX and is the benchmark index in the Seoul market.
Source: Focus Taiwan News Channel