Taiwan to launch Formosa Stock Index on May 5 (update)
Central News Agency
2014-05-02 11:05 PM
Taipei, May 2 (CNA) The Taiwan Stock Exchange (TWSE) said Friday it will launch the Formosa Stock Index on May 5, in collaboration with the GreTai Securities Market (GTSM), to gauge the performance of both the main board and the over-the-counter market. "The index can let people from home and abroad have a complete and wholesome idea of Taiwan's securities market," Chen Shin-chung, a senior vice president at TWSE, said at a press conference in Taipei. The Formosa Stock Index will have a total of 1,506 constituents, 843 from the main board and 663 from the OTC market that are currently operated by the GTSM, according to the TWSE. The combined index will be calculated based on share prices on the two exchanges on Dec. 31, 2013, with a base index of 10,000 points. Taiwan's financial authorities can also use the index as reference for future policies, Chen said, adding that the index can also provide another option for financial products. The launch of the new index follows the lead of other regional markets, with the aim of greater internationalization of the local equity markets, the TWSE said. China, Japan and South Korea all have similar indexes, such as the Shanghai Shenzhen CSI 300 Index, the JPX-Nikkei Index 400, and KRX 100 Index, the TWSE said. It said it will work with the GTSM and international index providers to set a criteria for picking certain stocks on the main board and OTC market to launch new indexes. These will comprise a smaller group of constituents, but will be able to provide different indications to investors, the TWSE said. (By Frances Huang and James Lee)
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