The Taiwan equity market helped drive a strong third quarter for emerging markets, according to new research from global index provider FTSE Russell. And recent trading activity in futures contracts related to the FTSE RIC Capped Taiwan Index further illustrate growing investor interest in this important emerging market.
Taiwan equities rose 10.4% in the third quarter on a US Dollar basis, behind India (+15%) and China (+12.7%) as key regional drivers according to the FTSE RIC Capped Index Series, which offer targeted exposure to various global equity markets. And, notably, the Taiwan market has risen 8.4% in 2020 and 25.7% in the last year as of September 30.
At the same time, Singapore Exchange (SGX) has observed growing activity in futures contracts based on the FTSE Taiwan RIC Capped Index among regional and global investors. This is reflected in an 83% increase in monthly trading volume in this contract from August to September—the first full months of trading in the new contract—while outstanding positions grew to US$1.2 billion within three months of launch on 20 July. The US CFTC certified futures contract delivers diversified country-specific exposure to a wide spectrum of investors.
Source: SGX.
Jessie Pak – managing director, head of Asia Pacific, FTSE Russell:
“Recent emerging equity market performance helps illustrate that, in a volatile year for global equities and amid major global issues like COVID-19, it is important for investors to take a global view to asset allocation and portfolio diversification. Seeking regional and single country exposure through investment strategies based on market indexes can be an efficient way to do this.”
Michael Syn – senior managing director, head of equities, Singapore Exchange Ltd.:
“We are encouraged by the vote of confidence from market participants in the SGX FTSE Taiwan Index Futures contract, with sustained growth in activity and open interest since launch. Global investors are increasingly looking to index-based derivatives to manage risk and pursue investment opportunities, and we are in a strong position to deliver trusted, pan-Asian access solutions to support our customers.”
FTSE Russell and SGX recently partnered to significantly grow a broad range of indexes from FTSE Russell for SGX’s pan-Asia shelf of benchmark equity derivatives, including regional and single country futures based on indexes calculated by FTSE Russell. Get more information about the FTSE Global RIC Capped Index Series.
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