The turnover ratio of the local bourse is expected to improve next year, as investors will be allowed to conduct day trading in a wider range of stocks from January, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.
Speaking during a session of the Legislative Yuan’s Finance Committee, Chang said the relaxed measures for day trading (buying and selling a stock on the same day) is expected to boost buying interest in the local bourse, so that the turnover ratio is likely to grow accordingly from January.
Chang said that the buying interest will only improve gradually.
Chang said, the turnover ratio, which is a ratio of total trading volume to market capitalization, is expected to stand at only 83 percent this year. The figure is lower than the ratio of almost 85 percent recorded last year, according to government statistics.
In September, the Financial Supervisory Commission announced that investors would be allowed to conduct day trading in select large and mid-cap stocks, with the new measures scheduled to take effect on Jan. 6.
Currently, day trading is only allowed for margin trading or short selling. In the plan’s initial stage, the stocks opened to day trading will be large-cap stocks in the FTSE TWSE Taiwan 50 Index and the FTSE TWSE Taiwan Mid-Cap 100 Index.
In addition to the relaxed day-trading rules, Chang said the world economy is on the way to improvement, which is positive for global equity markets, including Taipei’s.
Chang said that if the US Federal Reserve announces a scaling back of its monthly US$85 billion bond-buying program soon, the move could further reinforce the public’s belief that the economic fundamentals of the US have become healthier after the large fund injections.
The TAIEX closed down 0.04 percent at 8,349.04 points yesterday.