Cross listings of tech ETFs in Taiwan, South Korea begin

2018/06/11 18:20:48 fontsize-small fontsize-default fontsize-big
Cross listings of tech ETFs in Taiwan, South Korea begin

Taipei, June 11 (CNA) Taiwan and South Korea on Monday launched cross listings of two exchange traded funds (ETFs) tracking high-tech stocks traded in the two countries' stock markets, according to the Taiwan Stock Exchange (TWSE).

The TWSE said the cross listings of the two ETFs resulted from an expansion in cooperation between the exchange and its South Korean counterpart -- the Korea Exchange (KRX) -- under a memorandum of understanding signed by the two sides in 2015.

The two ETFs are the Cathay Korea/Taiwan ITP ETF, issued by Taipei-based Cathay Securities Investment Trust in Taiwan, and the KODEX Korea Taiwan IT Premier ETF unveiled by Seoul-headquartered Samsung Asset Management in South Korea, the TWSE said.

The two ETFs track the cross-border Korea Taiwan IT Premier (ITP) Index, which was launched in September 2017, and are jointly compiled and managed by the exchange and the KRX.

Only companies that have already issued single stock futures and have a free float adjusted market cap (referring to the value of shares traded in the stock market) of over US$2.5 billion have been selected for the Korea Taiwan ITP index.

Based on the criteria, the index has 26 constituents, 17 from Taiwan and nine from South Korea.

Among the top 10 stocks in the index are contract chipmaker Taiwan Semiconductor Manufacturing Co., electronics giant Samsung Electronics Co. and memory chip supplier SK Hynix Inc. of South Korea, Taiwan-based iPhone assembler Hon Hai Precision Industry Co., and Taiwanese integrated circuit designer MediaTek Inc.

Others in the top 10 are Taiwan-based smartphone camera lens supplier Largan Precision Co., South Korean search engine operator Naver Corp., Taiwanese telecom service provider Chunghwa Telecom Co., South Korean battery supplier Samsung DI Co., and Taiwanese IC packaging and testing firm ASE Industrial Holding Co.

TWSE Chairman Hsu Jan-yau (許璋瑤) said the cross listings of the two ETFs showed that cooperation between his exchange and the KRX is running deeper than ever.

"I am particularly pleased that the ITP ETF cross listing has the ability to leverage each other's strengths to appeal to global investors in both markets," Hsu said.

"Our continuing work with KRX represents a strengthening cooperation and is part of the TWSE strategy to engage with regional and international exchanges to create listed products that synergize the Taiwan capital market," he said.

According to the Financial Supervisory Commission, the top financial regulator in Taiwan, a total of 118 ETFs had been launched in Taiwan as of April and account for 7 percent of total equity turnover in Taiwan.

(By Tien Yu-pin and Frances Huang)
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