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Mr. Taizo Nishimuro, President & CEO of the Tokyo Stock Exchange, Inc. (TSE) and Dr. Gordon S. Chen, Chairman of the Taiwan Stock Exchange Corporation (TSEC) today have signed a Memorandum of Understanding (MOU) on the "Market Alliance Project" in Tokyo on behalf of the two exchanges.
Following the "Agreement on Mutual Cooperation" signed in November 2000, TSE and TSEC held several working-level meetings to discuss potential joint cooperation activities for the purpose of enhancing cross-border trading between the two markets.
During the working-level meetings, TSE and TSEC reached a consensus that signing an "MOU on Market Alliance Project" will pave the way for further promotion, and will also ensure that concrete action is taken to reach our goals. In this MOU, the two exchanges agree to develop and foster a favorable environment for cross-border trading between Japan and Taiwan, with benefits for both exchanges.
Based on this MOU, TSE and TSEC will cooperate in the following areas:
- Supporting PR activities for each others' markets
- Supporting IR seminars held for listed companies
- Continuing with a feasibility study into Co-trading Links
- Conducting studies into additional ways of promoting and enhancing cross-border trading
TSE President & CEO, Mr. Taizo Nishimuro, commented, "through the conclusion of this MOU, I look forward to a strengthening of the cooperative relationship between our two exchanges and a stimulation of securities transactions between Taiwan and Japan. Tokyo Stock Exchange will continue to work to enhance alliances with securities exchanges in the North-east Asia region, and further improve convenience for investors and other market participants."
Dr. Gordon S. Chen, TSEC Chairman, commented: "I am delighted that the Tokyo Stock Exchange is granting assistance to our first IR seminar in Tokyo this coming September. This will be the first cooperative event to be conducted under this new MOU. Both exchanges plan to further investigate the possibility of listing ETFs which track each others' market indexes. The Taiwan Stock Exchange looks forward to advance collaboration with the Tokyo Stock Exchange, one of the preeminent exchanges not only in the region, but in the world. We believe this cooperation will provide investors on both sides with greater value."
About Tokyo Stock Exchange, Inc.:
Tokyo Stock Exchange, Inc. is the premier exchange for Japanese cash equities and derivative products from the perspective of investors both in Japan and abroad. In 2005, stock trading volume on TSE reached 558 billion shares, an increase of 48 percent from the previous year. This has positioned TSE as the central market of Japan, accounting for 91.3 percent of the total volume of stock trades in the country. Also in 2005, TSE recorded an average daily trading volume of 2,281.2 million shares, and daily average trading value of JPY 2,007.2 billion. At the end of June 2006, the number of listed Japanese companies was 2,350, with a market capitalization reaching JPY 517.0 trillion. In addition to its core Japanese equity market, TSE provides markets for derivatives products such as long-term Japanese government bond futures and TOPIX index futures. Japanese Government Bond (JGB) futures trading, the cornerstone of TSE's fixed income derivatives market and the benchmark of the Japanese bond market, continues to thrive on investor demand from across the globe. The JGB futures contract is one of the most active long-term interest rate futures contracts in the world, with average daily trading volume reaching approximately 40,000 contracts in 2005. The TOPIX futures contract, which is actively traded by institutional investors, is the leading stock index futures product in Japan, with the largest open interest among Japanese stock index futures products. The average daily trading volume rose to approximately 52,000 contracts in 2005, an increase of about 25% over 2004. With respect to these cash and derivative products, the TSE, as a self regulatory organization, continuously makes every effort to provide a fair, transparent, and efficient market.
About Taiwan Stock Exchange Corporation:
The Taiwan Stock Exchange Corporation is the pre-dominant equity market in Taiwan. Its stock market rounded off the year 2005 with the Taiwan Stock Exchange Capitalization Weighted Index (TAIEX) closing at 6,548 points, a 6.6% increase in comparison with 2004's close of 6,140 points. In 2005, 691 companies were listed on the Taiwan Stock Exchange Corporation (TSEC), 6 less than at the end of 2004. Market capitalization grew by NT$1.59 trillion to NT$15.63 trillion during the same period. The average daily trading value decreased to NT$77.2 billion, or NT$19.5 billion less than that of a year ago. The number of investors who opened accounts on the exchange amounted to 7,740,024, or 129,381 more than in 2004, and the number of securities brokerage outlets decreased by 28 to a total of 1,125 in 2005.
TSEC is among the most liquid markets of the world. An array of exchange-traded equity derivatives further facilitates various classes of innovative trading strategies in our market. Options on TAIEX, the all ordinary index of the TSEC, ranked number three in the world in terms of trading volume. TTT Fund, the first ETF in Taiwan that tracks TSEC Taiwan 50 index, our blue-chip index, ranked number six globally by Morgan Stanley in terms of asset under management.
TSEC works in cooperation with the regulatory authorities in its reform of the securities market in order to lead the Taiwan securities market into a new era of liberalization and internationalization. TSEC implemented many reform measures throughout 2005 in order to enhance the operational efficiency and the quality of service of the Taiwan securities market, bringing it in line with international developments.
