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TWSE aiming to push turnover to NT$120 billion

2016/07/04 22:23:33

Taipei, July 4 (CNA) The Taiwan Stock Exchange (TWSE) has set a goal of pushing daily turnover on Taiwan's stock market to NT$120 billion (US$3.73 billion) and is preparing several measures to try to achieve the goal.

Shih Jun-ji (施俊吉), who took over as chairman of the TWSE on July 1, said he will try his best to get more investors to return to the trading floor and lift daily turnover.

According to the Directorate General of Budget, Accounting and Statistics, average combined daily turnover on the main exchange and the over-the-counter market in the first five months of this year was down 14.2 percent from a year earlier at NT$96 billion.

The decline has come as many major market players have retreated from the trading floor.

A "major player" is defined in Taiwan as an investor who trades at least NT$500 million in shares in a single quarter. Their numbers are an important indicator of investor confidence in the country's capital markets.

Shih said the TWSE has set six principles to energize the markets, hoping to drive combined daily turnover of the two markets to NT$120 billion.

Among the six principles are to make the market more international, push for more quality companies to list in Taiwan, and ease market restrictions to help the bourse meet global standards, Shih said.

In addition, Shih said, the TWSE is determined to broaden its product portfolio to cater to more investors and continue to set up partnerships with its foreign counterparts to boost its global visibility.

He said the TWSE will try hard to implement the government's financial policies to make the market a better venue for investors.

Commenting on the current low turnover, Shih said Taiwan already has a wide range of financial products but it needs more products to attract investors as turnover as fallen significantly.

In addition, the TWSE will pay close attention to foreign ratings agencies' evaluation of domestic stocks and continue to keep global index provider MSCI Inc.'s weighting adjustments in mind to make the local stock market better, Shih said.

Compared with other markets in the region and even Wall Street, the domestic market's average valuation is relatively low, and many stocks in Taiwan are very attractive to foreign investors, Shih said.

Some small and medium-sized firms with low valuations, however, have become targets for acquisition by foreign counterparts, he said.

Shih replaced Lee Sush-der (李述德), who retired at the end of June, to become TWSE chairman.

Shih has previously served as chairman of the Financial Supervisory Commission, the top financial regulator in Taiwan, and worked as a research fellow at Academia Sinica, the country's top research institution.

(By Tien Yu-pin and Frances Huang)