Taiwan Stock Exchange Corp (TWSE, 台灣證券交易所) intends to focus on boosting stock turnover next year as trading volume remains light despite a series of regulatory easing to invigorate the market, senior bourse officials said yesterday.
“The main bourse will try harder next year to boost trading volume, which has yet to return to its past high levels,” TWSE president Michael Lin (林火燈) said during a media briefing.
The TAIEX closed up 0.19 percent yesterday at 8,376.94 on turnover of NT$70.9 billion (US$2.39 billion), much lower than the bourse’s average daily target of NT$107 billion set for this year, Lin said.
Lin attributed the sluggish trading to persisting fund outflows to foreign markets and property investment, even though the government has significantly narrowed taxable thresholds for capital gains tax on stock transactions.
“Securities houses and major players remain uneasy about the levy and are in talks with the Ministry of Finance with a view to further relaxing the tax,” Lin said.
Starting in 2015, individual investors who sell NT$1 billion worth of local shares per year will have to pay either a 15 percent tax on their capital gains or a 0.1 percent tax on their stock trades in excess of NT$1 billion.
Individual investors also have to pay a 15 percent tax on net gains linked to initial public offerings on the main bourse, the emerging securities markets and unlisted companies.
The Financial Supervisory Commission (FSC) has approved plans to allow day trading — buying and selling stocks within the same trading day — of the 200 stocks targeted by major exchange traded funds, starting on Jan. 6 next year, Lin said.
In February, TWSE is to seek to shorten its stock matching time between buyers and sellers to 10 seconds, from the current 15 seconds, and it plans to cut matching time to 5 second in the second half of next year, Lin said.
In addition, the exchange is to work together with other organizations in sponsoring different campaigns next year to encourage stock holdings alongside futures and warrant investments so investors can enjoy greater flexibility in planning portfolios, Lin said.
However, it is not easy to redirect fund flows, Lin said, after FSC Chairman William Tseng (曾銘宗) told the legislature last week that about 50 percent of major stock players have yet to rejoin the local bourse.
Tseng defined major players as investors who trade more than NT$500 million in local shares per quarter, adding that only 644 accounts meet that qualification now, from the 1,253 accounts prior to the passage of the capital gains tax last year.
Still, TWSE expects daily turnover to hit an average of NT$115 billion next year on the back of an improving economy and more deregulations, Lin said.