Taiwan's two main exchanges said they plan to expand their portfolios with more China-related financial products through tie-ups with mainland bourses amid warming cross-strait ties.
Taiwan Stock Exchange Chairman Schive Chi said on April 03 that the bourse planned to sign a memorandum of understanding with the Shanghai stock exchange as early as this year.
The over-the-counter Gre Tai Securities Market, the main exchange for Taiwan's bond trades, plans to offer yuan-denominated bonds to emulate the success of nearby Hong Kong, Chairman Gorden Chen said.
"Our preparations are almost complete. We are just one step away from signing a deal with Shanghai," Schive said at the 2012 Boao Forum for Asia on the Chinese island of Hainan.
"After we sign the deal, both exchanges will be able to exchange information, which will allow people to come up with new indexes and new products, such as ETFs (exchange traded funds)," said Schive, 64, who assumed his post in 2008.
ETFs are traded like shares and used to track indexes, either by holding underlying assets or by synthetically replicating returns through derivatives.
Hong Kong and Taiwan's stock regulators agreed in May 2009 on ETF cross-listings between exchanges.
Schive said once the Taiwan exchange reached an agreement with Shanghai, a similar alliance with the Shenzhen stock exchange could be next.
Taiwan's exchange, with a market capitalisation of $636 billion and 790 listed companies as of January, aims to have 38 initial public offerings this year, Schive added, roughly level with 2011.
China sees self-ruled, democratic Taiwan as a renegade province that has to be unified eventually, although a free trade agreement-like deal was clinched after Taiwan President Ma Ying-jeou was first elected in 2008.
Comments
Comments are closed for this article.