TWSE plans to increase offshore ETF offerings
05 September 2012
News, Asia, Taiwan
Taiwan Stock Exchange (TWSE) is planning to revive the local exchange traded funds (ETFs) market by introducing more offshore ETFs, according to a report from Economic Daily News on Tuesday (September 4).
Speaking at an ETF forum in Taipei, TWSE Chairman Chi Schive noted that the trading volume of ETFs only accounts for 1.2% of the total turnover of the equities market, which is relatively low compared to other regional markets. Korea’s ETF trading weighting stands at 7.23%, while Hong Kong’s is 4.67%.
He went on to say that about 17% of Taiwan’s overseas investment are placed in foreign ETFs. Therefore, the authority is studying the feasibility of introducing foreign ETFs to broaden the diversity of local index products and attract overseas capital.
Further, it has to address the problems of high transaction costs, low liquidity and small scale facing the local ETF market. Mr. Schive noted that the authority is mulling waiving the tax duty for local bond ETFs to reduce transaction costs.
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