The Far East just got a little but smaller but the trading universe a bit bigger as two major capital markets have linked together.
The Taiwan Stock Exchange and Japan Exchange have formally linked their respective home trading markets and will cross-list the Fubon TOPIX Leveraged 2X Index ETF and the Fubon TOPIX Inverse -1X Index ETF. The two ETFs will cross-list beginning on September 10.
Fubon Asset Management will issue both ETFs. The new ETFs also comply with the Financial Import Substitution Program currently being promoted by the FSC.
The Tokyo Stock Price Index (TOPIX) contains over 1,800 stocks and is calculated based on all common stocks listed on the Tokyo Stock Exchange (TSE) First Section. It is a major indicator used to evaluate overall trends in the Japanese stock market.
“TWSE is proactively building alliances with international exchanges in line with the Financial Supervisory Commission’s mission of encouraging the Taiwan financial sector to explore new markets in Asia,” said Sush-Der Lee, chairman of TWSE. “The cross-listing of financial products with JPX is a significant milestone for closer regional cooperation. Both TWSE and JPX will continue to expand cooperation, particularly in the areas of cross-listing and market promotion. TWSE is also actively looking for more opportunities to enter into cooperation schemes with other stock exchanges in Asia in the future.”
The two newly listed TOPIX-related ETFs are based on the “TOPIX Leveraged 2X Index ETF” and the “TOPIX Inverse -1X Index ETF” currently managed by TSE. These ETFs will attempt to replicate two times the daily movement of the TOPIX index and an inverse of the daily movement of the TOPIX index respectively. The two products will be TWSE’s first ETFs that track the Japanese stock market, providing investors with an excellent channel to access this market.
Also, TWSE and Osaka Exchange, a subsidiary of JPX and the operator of the largest derivatives market in Japan, have also entered into an agreement that will allow OSE to list futures contract on Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX).
The Taiwan and Japan capital markets have a history of close interaction following the signing of a Memorandum of Understanding in 2000. In addition to holding regular meetings in each other’s markets, both sides have jointly held a variety of activities, including developing plans for the cross-listing and market promotion of financial products. It is hoped that the deepening relationship and cooperation between the Taiwan and Japan markets will provide more diversified products to investors in the future.
