The Taiwan Monthly

Market & ETP Overview

Taiwan Capital Market Highlights 2022

2022 was a tumultuous year for the securities market. The impact of the Russia-Ukraine war and the extensive lockdown of China under the pandemic resulted in disruption of raw-material supply and the operation of the global supply chain, as well as high inflation. Central banks worldwide raised interest rates to curb inflation, thus dampening private demands and inducing capital outflow. Under this environment, the TWSE market still managed to attain some achievements over the year:

1. Strong performance in trading activities

TAIEX experienced a roller-coaster ride in 2022, peaking in Jan., slackening along with the global market on geopolitical crisis and accelerated interest-rate hikes by central banks worldwide, and then dropping in Oct. on concerns over higher interest rates along with the surging inflation. With listed companies’ solid fundamentals, TAIEX rebounded amid the alleviation of global inflation. In 2022, the TWSE total trading value amounted to NT$59.6 trillion, or NT$242.2 billion daily on average, with a total market capitalization of NT$44.3 trillion as of the year end. 

2. Record-high revenue and profits for listed companies

Despite the impact of the pandemic and geopolitical conflict, listed companies scored revenue growth in 2022 and distributed abundant cash dividends, fully exhibiting their business resilience. Their total revenue rose 5.34% to NT$40.2 trillion in the year, with Q1-Q3 net profits after-tax advancing 5.3%. Following total cash-dividend payouts of NT$2.19 trillion, up over 50%, for 2021, investors can still expect significant cash dividends for 2022, given listed companies' robust performance.

3. Smooth fund-raising channels

According to the World Federation of Exchanges (WFE), the number of IPO cases and total IPO fund-raising value plunged 49% and 45%, respectively, in the first 11 months of 2022. Nevertheless, with the gradual decline of the pandemic's influence and the unrelenting promotion, the TWSE staged a superb performance in fund raising in 2022. The number of newly listed companies reached 23, while the number of companies applying for listing came to 26. The total fund raising amount from stock reached NT$268.9 billion, with IPO fund raising reaching NT$27.78 billion, both hitting new highs.

4. Unabated investor interest

As of the end of 2022, there were 12.02 million investors with trading accounts, 520,000 newly opened and 5.5 million investors traded in the year, exhibiting the investors’ unabated interest. The number of investors with trading accounts under the age of 40 rose to 3.94 million, 860,000 higher than three years ago. The trading activities of odd lots and ETFs also reflected an increasing presence of young investors, with the share of odd lots trades rising to 0.83% of the total trading value in 2022, up from 0.54% in the previous year. Meanwhile, ETF trading value increased to 4.93%, up from 2.57% in 2021, with its trading value and assets under management both hitting new highs.

5. Fostering an innovation friendly eco-system

Over the past year, the TWSE has further reinforced its startup eco-system via refinement of the Taiwan Innovation Board (TIB), plus enhancement of TIB brand and market positioning. It has created more friendly legal conditions for TIB, through revision of related legislations to increase its flexibility, according to the feedback of intermediary institutions and the practices of global stock exchanges. The TWSE has been actively supporting the development of startups, including those affiliated with business groups. Thus, there were eight startups listing on TIB in 2022. Moreover, the qualifications for TIB investments have been loosened, which, plus the effect of promotional events, have pushed the number of qualified investors to over 110,000 (+67% YoY). To assure liquidity, the TWSE has also put in place market making mechanism for the TIB market.

6. Strengthening market information-security mechanism

The TWSE and peripheral units set up a "Security and Future Computer Emergency Response Team (SF-CERT)" for operation, enabling firms to cope with emergent incidents around-the-clock. The TWSE has also formulated various guidelines on information security for the associations of securities firms, futures firms, and securities investment trust and consulting firms in formulating self-discipline norms. Furthermore, the TWSE has endeavored to prevent the occurrence of information-security incidents by actively identifying and tracking common issues of supply chains. To further strengthen securities firms' information-security protection and resiliency, the TWSE has demanded third-level securities firms with online order services to install such protective mechanisms as IPS (Intrusion Prevention System), WAF (Web Application Firewall), and SOC (Security Operation Center) by March 2023, plus assistance for fourth-level securities to have installed IPS and WAF by the end of 2022. To cope with credential stuffing attacks, the TWSE has assisted securities firms in adopting a two-factor authentication mechanism.

7. Education and promotion through virtual and physical channels

Amid the pandemic, the TWSE has expanded digitalized financial education and anti-fraud campaigns, supplementing physical securities knowledge workshops and a series of financial-education lectures. To increase young people's wealth management knowledge and raise their risk awareness, the TWSE has collaborated with Internet influencers and installed a dedicated section on the corporate website, which has attracted browsing 13.7 million times.

8. Increasing the visibility of the Taiwan capital market

With the reopening of international travel in 2022, the TWSE attended the annual WFE and IOSCO meetings, as well as meetings with various stock exchanges and market institutions. The TWSE has also kept close communications with intermediary institutions and helped listed companies communicate with overseas investors via meetings and investment events. In 2022, the TWSE held eight investment events, in physical and virtual forms, participated in by representatives from 1,547 institutions and 221 TWSE- and OTC-listed companies, a scale surpassing previous years. To facilitate international investors accessing listed companies information, the TWSE rolled out a bilingual inquiry website – “ezSearch,” enabling switching to English-language interface in a quick, simple, and intuitive manner, upgrading information-disclosure quality and operating convenience.

For further information, please contact Mr. Lin at 1241@twse.com.tw.