First meeting with US stock exchange management in five years
With US leading foreign investment, delegation aims to attract more capital inflow to Taiwan
NEW YORK/HONG KONG SAR/SINGAPORE - Media OutReach - 28 August 2023 - The Taiwan Stock Exchange (the "TWSE") and a delegation of Taiwan's securities regulatory authority will visit the New York Stock Exchange (the "NYSE") and Nasdaq and The Depository Trust & Clearing Company (the "DTCC") in mid-September to engage in discussions with the US exchanges, leading US institutional investors and others to emphasize the advantages of Taiwan's stock market, enhance investor confidence in the Taiwanese capital market and attract foreign investment to Taiwan.
The visit marks the first high-level meeting between the TWSE, and both Nasdaq and NYSE in the past five years. The delegation will be led by Chen-Shan Chang, Director-General of the Securities and Futures Bureau, an arm of Taiwan's top financial regulatory authority, the Financial Supervisory Commission, and Sherman Lin, Chairman and CEO of the TWSE. They will engage in discussions with their US counterparts to seek advice and views on topics such as the US move to a T+1 settlement cycle, ESG issues, carbon trading and trends in clearance and settlement.
Lin said, "The meeting will be the largest in-person exchange activity between the TWSE and both Nasdaq and NYSE since 2017, when the TWSE visited the US to attract foreign capital. We highly value this meeting and look forward to the outcomes."
The US tops foreign capital in Taiwan with 40% share
According to the TWSE, foreign investors play a significant role in Taiwan's stock market. As of the close of 2022, the US accounted for over 40% of foreign capital in Taiwan's stock market, making it the largest source of foreign investment. Also, during the visit in September, the Taiwanese delegation will pay individual visits to around 18 US companies that hold a higher proportion of Taiwanese equities in their portfolios, including large-scale asset management companies, banks, index companies, and proxy advisors.
Lin added, "Taiwan places great importance on the US market and US investors. We hope to equip US investors with more in-depth knowledge of the investment potential in the Taiwanese capital market, establish stronger ties with institutional investors, and hence deepen our connections with the key legal representatives of these institutional investors."
With this visit to the US, the TWSE aims to provide institutional investors in New York and Boston with up-to-date key information on the Taiwanese securities market.
Foreign capital drives up Taiwan stock prices
Taiwan stocks, which have long been sought after by foreign investors, have surged by almost 60% over the past five years with the average daily trading volume more than doubling since 2017.
So far in 2023, the proportion of foreign capital in Taiwan stocks has exceeded 40%, which has driven up stock prices in Taiwan. According to data from the TWSE, as of July 31, Taiwan's stock market was up 21.27% for the year, second only to the Japanese stock market at 27.12% among Asian stock markets; and the accumulated net overbought position by foreign investors was approximately USD 9.2 billion.
The total revenue of listed companies in Taiwan hit a record high of USD 1.31 trillion in 2022, with an annual growth rate of more than 5%. Judging from the estimated distributable cash for dividends, the estimated dividend yield is close to 5%, ranking among the best in the world. Among the constituent stocks of the Taiwan stock index, listed companies in technology, semiconductors and electronic components have a combined weight of more than 50%.
Lin has introduced multiple new initiatives since taking office in July last year, including the innovative ESG InfoHub and Investment InfoHub - The Taiwan Markets Dashboard launched in July this year to establish a one-stop information service platform to further strengthen the TWSE's services for international investors.
Along with ESG InfoHub and Investment InfoHub, the TWSE also launched several new key measures in July, including the "Taiwan New Economy Industry Index", which covers the listed companies of four new categories, namely "Digital and Cloud Services", "Sports and Leisure", "Green Energy and Environmental Services", and "Household", as well as the "Taiwan Innovation Board Index" to highlight Taiwan's new economy companies. As part of the effort to promote the Innovation Board, Lin visited in person more than 100 companies with growth potential over the past year.
The Taiwan Carbon Solution Exchange was officially launched on August 7. Lin, who serves as the Chairman of TWSE, also holds the position of Chairman of Taiwan Carbon Solution Exchange.
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The Taiwan Stock Exchange (the "TWSE") started operations on February 9, 1962. The TWSE is responsible for operating and advancing the Taiwan securities market. The TWSE's primary business operations include listing, trading, settlement and surveillance. These comprise listing promotion and review, post-listing supervision and corporate governance, maintaining market trading and order, securities firms' services, investor protection, clearing and settlement operations, safeguarding against market defaults and the monitoring of illegal transactions. The Exchange provides comprehensive services to the stock market.