Published On: Mon, May 12th, 2014

Taiwan Stock Exchange And GreTai Securities Market Jointly Develop Cross-market Formosa Stock Index

Lee Sush-Der, Chairman Taiwan Stock Exchange

Lee Sush-Der, Chairman Taiwan Stock Exchange

In an announcement campaign on May 5th, the Taiwan Stock Exchange (TWSE) and the GreTai Securities Market (GTSM) jointly launched their first co-compiled index, the “Formosa Stock Index”, Taiwan’s first cross-market index.

Taiwan securities market features two local bourses, namely the TWSE market and the GTSM market; the TAIEX and the GTEX measure the performance of these two markets respectively. At present, in order to get an overview of the Taiwan securities market, market participants can obtain combined market values, trading values, and total listings for TWSE and GTSM. Nevertheless, no corresponding index is available for reference. Therefore, TWSE and GTSM arranged to develop a cross-market index, covering stocks listed on both TWSE and GTSM, to measure the aggregate performance of the whole Taiwan securities market.

The Taiwan cross-market indexes are slated to launch in two separate stages. The Formosa Stock Index, launched on May 5th, is a highly representative broad-based index developed at the first stage, covering all constituents of TAIEX and GTEX, so both domestic and international investors will have a good grasp of the aggregate performance of the Taiwan securities market as a whole. The second stage will unveil co-compiled narrow-based indexes in the series, in order to make the index series more complete. The narrow-based indexes will target specific sectors or themes, and eligibility criteria for constituents will be designed to meet investment needs.

The Formosa Stock Index is the first index co-compiled by TWSE and GTSM. It is also the first domestic cross-market index of the Taiwan securities market and is expected to mark a critical turning point in the development of the Taiwan securities market. The TWSE and GTSM will continue to collaborate in the development of various indexes to meet the investment needs of the investing public.

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