The Taiwan Stock Exchange (TWSE, 台灣證交所) yesterday announced Monday’s planned launch of the Formosa Stock Index in collaboration with the GRETAI Securities Market (GTSM, 櫃檯買賣中心), intended to gauge the performance of both the main board and the over-the-counter market (OTC).
The Formosa Stock Index is to have 1,478 constituents — 821 from the main board and 657 from the OTC market, which is operated by the GTSM, the TWSE said.
The Formosa Stock Index is to be calculated based on share prices on the two exchanges as of the end of last year, with a base index of 10,000 points.
The launch of the index is modeled on other regional markets, with the aim of greater internationalization of local equity markets, the TWSE said.
One such example is China’s Shanghai Shenzhen CSI 300 Index, which was launched in 2005 by the exchanges in Shanghai and Shenzhen, the TWSE said.
The TWSE said it will work with the GTSM and international index providers to set criteria for picking certain stocks on the main board and OTC market to launch new indices.
These will compose a smaller group of constituents, but will be able to provide different indications to investors, the stock exchange said.