The Taiwan Monthly

Sep. 2023

Global Connection

The TWSE to visit US in September, engage with major stock exchanges, prominent institutional investors and leading market infrastructure

The Taiwan Stock Exchange (the "TWSE") and a delegation of Taiwan's securities regulatory authority will visit the New York Stock Exchange (the "NYSE") and Nasdaq and the Depository Trust & Clearing Company (the "DTCC") in mid-September to engage in discussions with the US exchanges, leading US institutional investors and others to emphasize the advantages of Taiwan's stock market, enhance investor confidence in the Taiwanese capital market and attract foreign investment to Taiwan.

 

Sherman Lin, Chairman and CEO of the TWSE, has introduced multiple new initiatives since taking office in July last year, including the innovative ESG InfoHub and Investment InfoHub - The Taiwan Markets Dashboard launched in July this year to establish a one-stop information service platform to further strengthen the TWSE’s services for international investors.

 

Along with ESG InfoHub and Investment InfoHub, the TWSE also launched several new key measures in July, including the "Taiwan New Economy Industry Index", which covers the listed companies of four new categories, namely "Digital and Cloud Services", "Sports and Leisure", "Green Energy and Environmental Services", and "Household", as well as the "Taiwan Innovation Board Index" to highlight Taiwan's new economy companies. As part of the effort to promote the Taiwan Innovation Board, Lin visited in person more than 100 companies with growth potential over the past year.

 

Taiwan's capital market is facing competition from global exchanges and needs to confront international challenges in order to enhance its global competitiveness. Following with the one-year anniversary of Chairman Sherman Lin's appointment to the Taiwan Stock Exchange, the mission to engage with the international arena continues. In mid-September, Chairman Sherman Lin, along with Chen-Shan Chang, the Director of the Securities and Futures Bureau, will lead a delegation to the United States to personally meet with 18 institutions, including not only exchanges and the DTCC but also large-scale asset management companies, banks, index companies, and proxy advisors.

 

According to the TWSE, foreign investors play a significant role in Taiwan's stock market. As of the close of 2022, the US accounted for over 40% of foreign capital in Taiwan's stock market, making it the largest source of foreign investment. Lin added, "Taiwan places great importance on the US market and US investors. We hope to equip US investors with more in-depth knowledge of the investment potential in the Taiwanese capital market, establish stronger ties with institutional investors, and hence deepen our connections with the key legal representatives of these institutional investors."

 

Taiwan stocks, which have long been sought after by foreign investors. So far in 2023, the proportion of foreign capital in Taiwan stocks has exceeded 40%, which has driven up stock prices in Taiwan. According to data from the TWSE, as of July 31, Taiwan's stock market was up 21.27% for the year, second only to the Japanese stock market at 27.12% among Asian stock markets; and the accumulated net overbought position by foreign investors was approximately USD 9.2 billion. The total revenue of listed companies in Taiwan hit a record high of USD 1.31 trillion in 2022, with an annual growth rate of more than 5%. Judging from the estimated distributable cash for dividends, the estimated dividend yield is close to 5%, ranking among the best in the world.

 

With this visit to the US, the TWSE aims to provide institutional investors in New York and Boston with up-to-date key information on the Taiwanese securities market. Lin said, "The meeting will be the largest in-person exchange activity between the TWSE and both Nasdaq and NYSE since 2017, when the TWSE visited the US to attract foreign capital. We highly value this meeting and look forward to the outcomes."