The Taiwan Stock Exchange (TWSE) is working on improving a key trading system popular among retail investors and planning longer trading hours to attract more demand, the bourse’s chairman said yesterday in Taipei.
The exchange is studying ways to optimize the so-called odd-lot transactions mechanism, which caters to trades involving less than one standard unit of shares and is heavily used by individual investors, TWSE chairman Sherman Lin (林修銘) said in an interview.
Reforms under consideration include moving the start time of such trades 10 minutes earlier to 9am to match the market’s regular trading hours, Lin said, adding that the exchange is considering shortening the current five-second order matching cycle.
Photo: CNA
“Our goal is to complete odd-lot trading reforms by year-end through actively working with securities firms,” Lin said. “Retail investors play such a big role in Taiwan’s market. We must safeguard their interests.”
Having risen about 50 percent this year, Taiwan’s stock market has emerged as one of the world’s top performers, fueled by demand for artificial intelligence trade and a surge of buying by retail investors.
Already at a record high, the local bourse recorded another milestone by surpassing India’s stock market this month to become the world’s fifth largest.
The exchange is also discussing with brokerages extending the market’s regular trading hours of 9am to 1:30pm, he said, without offering a specific timeline.
“Extending trading hours may take more time to implement, as the process is relatively complex,” he added.
Equities bourses around the world have embarked on a trend to lengthen trading hours to better capture investor flows. For example, South Korea’s main stock exchange plans to extend its business hours to 12 a day this year from the current six-and-a-half hours.
Despite the strong rally, Taiwan’s tech-heavy stock market remains undervalued compared with its global peers, Lin said.
The TAIEX trades at about 20 times forward earnings, versus the NASDAQ 100’s 25 times.
Lin highlighted Taiwan’s unique strength in hosting the entire semiconductor supply chain.
“We are not selling one single company, we are selling the whole supply chain,” he said.
Foreign investors should recognize a “supply chain premium,” as more firms demonstrate management depths and strategic value, he said.
The exchange is urging listed companies to step up investor communications and lay out their medium and long-term strategies to help unlock value, Lin said.
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