Taiwan, Japan to launch cross border ETF listings this month

Taipei, Sept. 3 (CNA) Taiwan and Japan will kick off a series of cross border listings of exchange-traded funds (ETFs) this month, a milestone for the internationalization of the local ETF market, the Taiwan Stock Exchange (TWSE) said Wednesday.

In a statement, the TWSE said the cross border ETF listings between Taiwan and Japan are expected to boost the local capital market's visibility internationally and serve as a key for Taiwan becoming an asset management hub in the region.

An ETF, a pooled investment security that is traded like an individual stock, can be tracked from the price of a single stock to a large and diverse collection of securities.

According to the TWSE, Taiwan's Cathay Securities Investment Trust Co. has worked with Japan's Daiwa Asset Management to launch the iFree Cathay Taiwan Tech Leaders Index ETF on the Tokyo Stock Exchange on Sept. 12. The ETF will track Taiwan's Cathay Taiwan Technology Leader ETF.

In addition, Nomura Asset Management Taiwan has teamed up with its Japanese parent Nomura Asset Management to list the NEXT FUNDS-Nomura TOPIX Feeder ETF in Taiwan on Sept. 18, which will track Japan's NEXT FUNDS TOPIX-linked Exchange Traded Fund, the largest ETF in Japan, the TWSE said.

Meanwhile, Nomura will list another ETF in Japan also on Sept. 18 to track NEXT FUNDS-Nomura Taiwan Innovative Technology 50 ETF, according to the TWSE.

Since Taiwan listed its first ETF -- Yuanta/P-shares Taiwan Top 50 ETF -- in 2003, the TWSE said, the country has become the third largest ETF market in the Asian Pacific region.

As of the end of August, a total of 294 ETFs were listed on the local main board and the over-the-counter (OTC) market with aggregate assets of NT$6.77 trillion (US$220 billion), an increase of more than 30 fold from a decade earlier, beating the average 540 percent increase globally over the same period.

At a time when Taiwan has a vibrant ETF market and the Japan stock market is a focus in the region, it is the perfect moment to list cross border ETFs between Taipei and Tokyo, the TWSE said.

After cooperating with Japan, the TWSE said the exchange will push for similar efforts to launch more cross border ETFs or other financial products in the region and seek to expand such cooperation beyond the region.

This is expected to help the Taiwanese securities sector develop international connections and introduce innovative products that will strengthen the sector's global competitiveness, the TWSE said.