Tue, Jan 03, 2017 - Page 12 News List

TWSE working with FSC in effort to boost turnover

Staff writer, with CNA

The Taiwan Stock Exchange (TWSE) has worked closely with the Financial Supervisory Commission (FSC) to boost turnover on the stock market.

The TWSE, which operates the main exchange, said the FSC announced additional measures in November last year, including increasing the number of stocks eligible for day trading, to encourage investors to play the market and help it climb out of its turnover doldrums, the exchange said.

In line with the FSC’s goal to allow more stocks to be day-traded, the TWSE said it has expanded eligibility to all stocks allowed to be short sold, adding an additional 10 stocks open to day trading from the previous 1,428.

Day trading allows traders to first buy and then sell the same shares or vice versa on a single day.

The FSC has expanded the range of day trading at an accelerated pace since June 2014, hoping to boost interest in investing in the Taiwan exchange and lift market turnover.

The TWSE said that from the time the FSC started easing rules on day trading, day trading has accounted for 9.26 percent of total turnover by October last year, contributing to investor willingness to put money into the market.

However, its impact on overall turnover has been limited, as the market continued to face sluggish trading last year.

According to the TWSE, the aggregate turnover on Taiwan’s stock market totaled about NT$18.9 trillion (US$586 billion) last year, the lowest level in 15 years.

It was also the third consecutive year in which the annual turnover has declined, TWSE data showed.

Average daily turnover last year was about NT$75.5 billion, down more than 18 percent from a year earlier, the data showed.

The TWSE said it has also pushed for a small investment mechanism for retail investors, who have long said that they cannot afford such expensive stocks as smartphone camera lens supplier Largan Precision Co (大立光), which closed at NT$3,790 on Friday.

Shares in Taiwan are usually sold in minimum blocks of 1,000 shares, meaning investors would have to spend NT$3.79 million to buy Largan stock.

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