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Taiwan Stock Exchange launches Formosa Stock Index

TAIPEI, Taiwan -- The Taiwan Stock Exchange (TWSE) launched the Formosa Stock Index on Monday, in collaboration with the GreTai Securities Market (GTSM), to track the performance of both the main board and the over-the-counter market.

The TWSE said the new index will allow investors to gain more comprehensive information about Taiwan's securities market, as it will function in much the same way as the Shanghai Shenzhen CSI 300 Index in China, the JPX-Nikkei Index 400 in Japan and KRX 100 Index in South Korea.

"Taiwan needs a combined index to portray a complete picture of the local market," said Lee Sush-der (李述德), chairman of the TWSE, at the launch ceremony in Taipei.

The cross-market index will be shown simultaneously on global media outlets such as Reuters and Bloomberg to promote Taiwan's securities market, according to Lee.

Tseng Ming-chung (曾銘宗), chairman of Taiwan's Financial Supervisory Commission (FSC), echoed Lee's comments, saying that the index can help investors gain a better understanding of the development of the country's capital market.

Tseng said he hopes the new index will be another driving force in the market, attracting financial derivatives such as exchange-traded funds, futures and warrants.

The Formosa Stock Index has a total of 1,478 constituents, 821 from the main board and 657 from the OTC market that is currently operated by the GTSM, according to the TWSE.

The index, which is calculated based on share prices on the two exchanges at the end of 2013, with a base index of 10,000 points, closed up 0.12 percent at 10,373.48 on Monday.

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