The Taiwan Monthly

Jul. 2018

Global Connection

Taiwan Stock Exchange and Korea Exchange Expand Ties with Cross-listed ITP ETFs

11 June 2018 –The Taiwan Stock Exchange (TWSE) and the Korea Exchange (KRX) announce the cross listing of ETFs tracking the Korea Taiwan IT Premier (ITP) Index. The move further expands the growing links and cooperation between the two bourses and marks a significant milestone for TWSE and KRX aiming to bring mutual prosperity to the Taiwan and Korea capital markets. 


In Taiwan, the “Cathay Korea/Taiwan ITP ETF” listed today on TWSE and is managed by Taiwan’s Cathay Securities Investment Trust. In Korea, the “KODEX Korea Taiwan IT Premier ETF” listed today on KRX and is managed by Korea’s Samsung Asset Management. They both track the Korea Taiwan ITP index. 


The ITP index is the first cross-border index co-compiled by index teams of both exchanges, including TWSE’s wholly owned subsidiary Taiwan Index Plus (TIP) and the KRX Index Department. It is designed to combine the outstanding IT competitiveness of Taiwan and Korea as well as to capture the market advantages of Taiwan’s high dividend yield along with Korea’s high capital gains. The index selects constituents with a free float adjusted market cap of over USD 2.5 billion and those having already issued single stock futures in its home market. This screening criteria provides sufficient tools for hedging and strategic trading, which brings greater cross-border opportunities for global investors. 


Mr. Jan-yau Hsu, Chairman of TWSE said, “It gives us great pleasure to be developing our relationship with KRX. I am particularly pleased that the ITP ETFs cross listing has the ability to leverage each other’s strength’s to appeal to global investors in both markets. Our continuing work with KRX represents a strengthening cooperation and is part of the TWSE strategy to engage with regional and international exchanges to create listed products that synergize the Taiwan capital market.” 


Mr. Jiwon Jung, Chairman and CEO of KRX, said. “I’m very pleased to announce that KODEX Korea-Taiwan IT Premier ETF, the first outcome of the collaborative project between the KRX and the TWSE, is finally listed. I expect that the newly listed ETF will bring abundant capital to IT blue-chip companies both in Korea and in Taiwan. This truly marks the cornerstone of flourishing relationship between Korean and Taiwan capital markets. The KRX plans to work together with the TWSE to develop more co-compiled indices and the relevant ETFs such as high-dividend ETF in order to attract international investors’ interests to our capital markets.” 


Looking forward, the TWSE and KRX will continue to work together on new projects, which could include jointly compiling new themed indices of Taiwanese and Korean-listed companies and inviting more exchanges to jointly compile new indices, such as Asian representative or prominent in the technology industry. We hope it will allow us to explore untapped business potential on a more comprehensive scale and aim to deliver more value to our market participants with additional insight into the Asia-Pacific region.


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