The transaction value of small investment programs and odd-lot trading in Taiwan hit new highs last year, according to the Taiwan Stock Exchange (TWSE).
Small investment programs, also known as dollar-cost averaging plans, and odd-lot trading have served as twin engines of inclusive financing, significantly lowering the threshold to access the capital market, the TWSE said.
Since measures allowing retail investors to buy and sell stocks and exchange-traded funds (ETFs) through dollar-cost averaging mechanisms were introduced in 2017, investments made under dollar-cost averaging totaled NT$600 billion (US$19 billion) as of the end of last year, it said.
Photo: CNA
The average monthly investment through dollar-cost averaging rose 25 percent last year from a year earlier, TWSE data showed.
Meanwhile, average daily transactions in odd-lot trading last year reached NT$8.67 billion, up 41.54 percent from a year earlier and a soar of nearly 3,900 percent from October 2020, when such trading was first allowed before the market’s close, the data showed.
Before October 2020, odd-lot trading, which makes it easier for retail investors to buy high-priced stocks in smaller quantities, had been permitted only during after-hours sessions.
Taiwan’s push for financial inclusion echoes the views of UN Secretary-General’s Special Advocate for Financial Health Queen Maxima of the Netherlands, who has touted financial inclusion as a driver or accelerator of economic growth, job creation and social development, the TWSE said.
Investors aged 21 to 50 were the largest group who participated in dollar-cost averaging programs last year, accounting for more than 50 percent of total investments under the mechanism, TWSE data showed.
This suggested that younger generations are preparing for wealth management through long-term investing, the exchange said.
As for odd-lot trading, investors younger than 20 and those aged 21 to 30 made up 25.89 percent of participants, higher than the 16.35 percent share of the same age groups in non-odd-lot trading.
This indicated that odd-lot trading has helped facilitate smaller investors’ participation in the capital market, the TWSE said.
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