New ETFs Launched byTaiwan Exchange

Taiwan is moving ahead with plans to list more exchange-traded funds and have a more international exchange. The Taiwan Stock Exchange plans to list more than a dozen exchange-traded funds (ETFs) from the US, Japan, Korea, Singapore and France during the next six months.

The move marks a leap forward in the internationalisation of the island's capital markets according to Kathrin Hille of the Financial Times.

For example, the exchange should soon list with the cooperation of MSCI, the global index manager, to list its iShares ETF (EWT), which is listed on the New York Stock Exchange, in the local currency in Taiwan this month.

Taiwan is no newcomer to the ETF business. It listed its first ETF in 2004, and now has six such funds, whose total assets under management rank seventh in global securities markets.

Capital outflows from Taiwan have risen as investors are now able to more freely invest in global opportunities following pension reform and deregulation of the asset management market during the past few years.

The Taipei bourse is also negotiating with its Tokyo counterpart regarding mutual listings of each other's ETFs, and will this month discuss mutual listings of ETFs with the Abu Dhabi Securities Market. The presidential election in March will also likely spur a policy of more openess regarding economic ties with mainland China which might foster even the lsiting of Chinese companies on the Taiwan market.