The Taiwan Monthly

Dec. 2019

Market & ETP Overview

TWSE and HSI cohosted the Index & ETP Forum on November 14, 2019

     The Taiwan Stock Exchange Corporation (TWSE) and Hang Seng Indexes Company (HSI) cohosted the Index & ETP Forum on November 14, 2019. The event welcomed market experts from HKEX, local asset management firms, and securities dealers to join discussions on the latest trends in the ETP market, opportunities in index innovation, institutional investment strategies and other topics. The guest speakers also shared their views on cross-market trading strategies and market outlook. The event attracted 110 institutional representatives of banks, insurance companies, asset management firms, and securities firms.


  TWSE Senior Executive VP Thann-Shing Lao stated that index investing had been growing quickly and attracted a net inflow of more than US$350 billion into global ETP in the first three quarters of 2019 to push the assets invested in ETP up to US$5.78 trillion in total. Hong Kong and Taiwan, two important securities markets in Asia, launched their first ETF way back in 1999 and 2003 respectively, and reached an agreement of ETF cross-listing many years ago. There are 6 ETFs tracking HSI indexes in Taiwan and 3 HKEX listed ETFs tracking Taiwan stock indexes.


  The agenda included 1 keynote speech and 2 panel discussions. Ms. Anita Mo, Director & Head of Product and Business Development of the HSI, talked about opportunities and challenges in index investing from Hong Kong's perspective. In addition to the cross-market indexes, high dividend yield indexes and option strategy indexes, she especially highlighted the features of the ESG indexes the HSI has published in line with global trends.


  The first panel was chaired by Ms. Ya-Mei Chang, Vice President of the TWSE. She mentioned the assets invested in ETF in Taiwan had reached NT$1.56 trillion and the average daily trading turnover amounted to NT$12.8 billion. She also pointed out the constant stream of new products, including the first ETN in April, AI & robotics themed ETF, and recently launched ESG ETF. The panelists included representatives of HKEX, Yuanta Securities Investment Trust, Cathay Securities Investment Trust, and Fubon Securities. The discussion focused on observations of recent developments in ETF and ETN in Asia, such as the inverse 2x ETF, actively managed ETF, multi-asset ETF, and covered call ETN. The panel also discussed the measures to improve liquidity in Taiwan's ETP market and talked about how to increase the participation of foreign investors and domestic institutions.


  The second panel was moderated by Professor Wei-Yu Kuo of NCCU Department of International Business. The panel speakers included representatives of HSI, Shin Kong Investment Trust, Fubon Asset Management, and Fuh Hwa Securities Investment Trust. In response to the slow economic growth and low interest rates environment, the panel focused on the outlook of Asian markets, asset allocation and investment advice for institutional investors, and trends in index investing.


  To learn more about ETFs and ETNs, please visit the TWSE’s official website.