The Taiwan Monthly

Global Connection

TWSE Works Hand-in-Hand with Japan and Korea Exchanges to Achieve a Triple-Win

Having entered into a trilateral memorandum of cooperation on March 15, 2018 with the Japan Exchange Group (JPX) and the Korea Exchange (KRX), the Taiwan Stock Exchange (TWSE) took the initiative to invite the top executives of the two exchanges to visit Taiwan and start the mutual-visit program. On March 13, 2019, a meeting was held among the three leaders, including Jan-yau HSU, Chairman of the TWSE; Akira Kiyota, CEO of the JPX and Jiwon Jung, Chairman of the KRX. It was agreed in the meeting that the three parties will be dedicated to joint market promotion in the future. Additionally, focused around the theme of ESG (Environmental, Social, and Governance), the three exchanges will proceed with in-depth cooperation in two main aspects; the staff exchange and professional knowledge sharing program. The purposes are to increase the international visibility of the three exchanges through collaborative efforts and create added value for the markets. In the working meeting, the staff of the three exchanges held further discussions, aiming to solidify the substantial cooperation among them.

 

In recent years, significant progress has been achieved in promoting the cooperation between the TWSE and the JPX, such as products cross-listing; seven ETFs underlying Japanese market have been listed on the TWSE, including TOPIX and NIKKEI225. TAIEX Futures have also been listed on the Osaka Exchange. To attract more Japanese investment, the TWSE has started participating in the IR Festa, an annual investors' event hosted by the Japan Exchange, in 2015. In 2018, TWSE joined the event for the fourth time, aiming to promote Taiwanese capital market to the local individual investors in Japan. Visits were paid to local securities companies, with a hope to provide channels for Japanese individual investments in Taiwan. In addition, the TWSE also held Taiwan Investment Forums in Japan annually to communicate with institutional investors. With TWSE’s in-depth efforts in developing the Japanese Market, the ratio of foreign investments from Japan, as against the total foreign investment, has increased from 1.36% at the end of 2013 to 3.2% at the end of 2018. The growth rate was 135%.

 

The TWSE and the KRX have quickly developed an in-depth cooperative relationship. After signing the No. 2 Memorandum of Cooperation on December 11, 2015, the two exchanges announced in 2016 the cross-listing of the ETFs tracking TAIEX and KOSPI200, being the benchmark indices of the two markets. After this event, in 2017, the TWSE and the KRX have collaboratively compiled the IT Premier (ITP) index, with the purpose of developing both markets through high-technology industries. On June 11, 2018, the two exchanges further announced the simultaneous listing of the ETFs in both markets. In October, 2018, Taiwan and Korean markets were further expanded to Europe, where they were authorized to issue ETN on the Euronext, marking a new page in the cooperative relationship between the TWSE and the KRX. In addition, the “Invest in Korea Capital Market” held in Taipei showcases the collective marketing efforts of the two exchanges. To promote Taiwan’s capital market, the TWSE also sent experts to attend the Global ETP Conference in Seoul.

 

It is hoped that the recent meeting among the three top leaders of the TWSE, JPX and KRX will lead to increased exchange and cooperation, as well as better performance. Facing the severe coopetition in the world capital market, the TWSE endeavors to build up close cooperation with the exchanges in the area through an aggressive strategy for “International Linkage”. Apart from the JPX and the KRX, TWSE also actively solicit cooperative relationships with the exchanges in Malaysia, Vietnam, Thailand, Indonesia, and others to support the government’s “New Southbound Policy”. At the end of March, for professional exchange, the TWSE has arranged visits by the Indonesian Stock Exchange and the State Securities Commission of Vietnam. Shortly after that, in April, the TWSE representatives will participate in the annual meeting of the Asian and Oceanian Stock Exchanges Federation (AOSEF). This highlights the TWSE’s efforts in soliciting cooperation opportunities through the platform of international conferences for exchanges.

 

With over a half century of experience in business development, the TWSE will, based on its business foundation in Taiwan, develop its market in the Asia-Pacific area and strive for a place in the global market. Through its well planned and continuously ongoing efforts in establishing cooperative relationships, TWSE endeavors to increase the international visibility of Taiwan’s capital market and bring the country onto the international stage.

 

For further inquires, please contact Mr. Chang at 1138@twse.com.tw.