Taiwan and South Korea launched mutual listings of exchange-traded funds (ETFs) yesterday, a sign of closer business ties between the two nations as Taiwan seeks to boost the global visibility of its equity market.
The Yuanta KOSPI 200 ETF issued by Taipei-based Yuanta Securities Investment Trust Co (元大投信) opened for trading on the Taiwan Stock Exchange (TWSE), while the Tiger Taiwan TAIEX (H) ETF issued by Mirae Asset Global Investments Co was launched on the Korea Exchange (KRX) in Seoul.
The TWSE said the mutual ETF listings represented a new milestone for Taiwan’s and South Korea’s capital markets.
Photo: CNA
The mutual ETF listings came less than a year after the TWSE and the KRX signed a memorandum of understanding on cooperation in December last year.
Addressing a ceremony in Taipei for the Yuanta KOSPI 200 ETF, TWSE chairman Shih Jun-ji (施俊吉) said the exchange has worked hard to form strategic partnerships with foreign counterparts and the overseas listing of ETFs tracking Taiwanese stocks reflected those efforts.
International cooperation would likely bolster the TWSE and help the exchange become more globally competitive, Shih said.
TWSE president Lee Chi-hsien (李啟賢) led a delegation to Seoul to attend the ceremony for the listing of the Tiger Taiwan TAIEX (H) ETF and Lee exchanged views with KRX chief executive Jeong Chan-woo on cooperation between the two markets.
The Yuanta KOSPI 200 ETF tracks the KOSPI 200 Index, which is comprised of 200 large-cap stocks listed on the KRX that account for about 90 percent of the market’s capitalization and serves as the benchmark index for South Korean shares.
The KOSPI 200 Index had risen 7.12 percent this year at the end of last month.
The Tiger Taiwan TAIEX (H) ETF tracks the TAIEX, which was up 9.94 percent this year at the end of last month.
The Yuanta KOSPI 200 ETF is the first ETF in Taiwan to track South Korean equities. Taiwan had previously listed seven ETFs tracking equities in other markets, including Japan, Hong Kong, China and the US.
ETFs have been gaining popularity in Taiwan as the TWSE has diversified its portfolio and promoted the products.
According to the TWSE, 310,000 retail investors and more than 3,500 institutional investors now participate in ETF trading in Taiwan, up 28 percent and 52 percent respectively from 2003 when the first ETF was launched, indicating a rise in enthusiasm for the investment vehicle.
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