Taiwan Report 2019 News Briefs
TAIFEX to launch first offshore Nasdaq-100 index futures contract
Futures will be denominated in New Taiwan dollars and be based on Nasdaq-100 index, which tracks 100 largest non-financial firms on Nasdaq
The Taiwan Futures Exchange (TAIFEX) launched the world’s first offshore Nasdaq-100 index futures on September 30.
Denominated in New Taiwan dollars, this new futures contract is based on the Nasdaq-100 index, which is sub-licensed by the CME Group for listing on TAIFEX.
One of the world’s most frequently-cited technology indexes, the Nasdaq 100 tracks the 100 largest non-financial companies listed on Nasdaq, complementing closely with the strong technology focus of TAIFEX’s most popular trading products, including TAIEX Futures and TAIEX Options.
The launch of the new contract is TAIFEX’s second collaboration with CME Group, following the launch of futures contracts based on the S&P 500 and Dow Jones Industrial Average (DJIA) indexes sub-licensed by CME Group for listing on TAIFEX in 2017, and marks its inaugural collaboration with Nasdaq where the Nasdaq-100 index futures is listed for the first time outside of the United States.
The Nasdaq-100 index futures is cash-settled, with a smaller contract size – a multiplier of NT$50 (approx. US$1.)
per index will be available for trading during TAIFEX’s regular and night sessions (.45am to 1:45pm and 3.00pm to 5.00am of the next day, Taiwan time), covering both Taiwan and US trading hours. The contract value is around US$12,500.
Bing-Jing Huang, CEO of TAIFEX, says, “The launch of the Nasdaq-100 futures contract further strengthens our ability to cater to the growing demand in Taiwan and the Asia-Pacific for offshore technology-sector exposure, including the popular FAANG stocks.
Eastspring Investments completes fixed maturity product IPO
Company raises US$350 million for IPO, receives over US$1 billion in FMP-related net flows since the beginning of 2019
Eastspring Investments (Eastspring), the US$216 billion Asian asset management business of Prudential plc, has successfully completed the initial public offering (IPO) of its fixed maturity product (FMP) in Taiwan, bringing Eastspring total FMP-related net flows of US$1.08 billion since the beginning of the year.
Eastspring raised a total of US$350 million for its FMP IPO in Taiwan in what was the country’s largest mutual fund IPO this year. This FMP is the first of its kind with an early redemption feature and annual payout providing investors with flexibility in asset allocation as well as a focus on emerging market investment-grade bonds, making the product attractive to both retail and institutional investors.
This IPO followed on from a successful FMP launch by Eastspring Taiwan at the beginning of 2019, which raised US$340 million (NT$105.3 billion) and is the second-largest IPO in the industry.
Xavier Meyer, head of distribution at Eastspring, comments, “The success of our second FMP IPO in Taiwan is a testament to Eastspring’s ability to deliver investment solutions that cater to evolving investor needs. We look forward to growing our FMP offerings and capabilities as we continue to develop innovative investment solutions suited to the current volatile market conditions.”
Yuanta launches first ESG-focused ETF to be listed on TWSE
Yuanta’s ETF is benchmarked against the FTSE4Good TIP Taiwan ESG Index, which is compiled by FTSE Russell and Taiwan Index Plus Corp
Yuanta Securities Investment Trust Co. (Yuanta SITC) has launched Taiwan’s first ESG-focused ETF, which will be listed on the Taiwan Stock Exchange (TWSE).
The Yuanta FTSE4Good TIP Taiwan ESG ETF is benchmarked against the FTSE4Good TIP Taiwan ESG Index, which includes companies listed on the TWSE that meet globally recognized ESG inclusion standards used by the FTSE4Good Index Series.
Launched in 2018 in partnership with Taiwan Index Plus Corp, the index is the first domestic Taiwan benchmark developed using FTSE ESG Ratings and data model. The index captures 73 firms from the FTSE Taiwan Index.
In 2019, Taiwan Bureau of Labor Funds (BLF) also selected the index for a five-year passive mandate with an initial total size of US$1.4 billion, recognizing the growing demand from Taiwanese investors to incorporate sustainable investment into their portfolios.
The index is constructed using the FTSE4Good Emerging Index with selection criteria covering ESG Ratings as well as financial performance criteria. The ESG Ratings are comprised of an overall rating and a performance score based on over 300 individual indicator assessments.
The index is designed for use in the creation of index tracking funds, derivatives and as performance benchmarks. The value of assets tracking ETFs benchmarked to FTSE Russell indexes globally increased by 9% in the first half of 2019 to US$705 billion.