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Taiwan exchange in talks with NYSE, Nasdaq

TAIPEI - Taiwan’s stock exchange is in talks with major bourses in New York and Germany, seeking to boost its profile abroad through tie-ups with major global players, its chairman said on Wednesday.

The TSE has been talking for the last few months with NYSE Euronext, operator of the New York Stock Exchange, as well as Nasdaq Stock Market Inc and Deutsche Boerse, operator of Germany’s main stock exchange in Frankfurt, Chairman Wu Rong-i told Reuters.

‘All of these global stock exchanges are trying to find an anchoring point in Asia,’ he said in an interview. ‘Who should they look for? TSE will be their best partner.’

Wu said a tie-up could involve a duAl listing agreement that would allow stocks to trade on both exchanges, or a stake purchases by either partner in the other.

Exchanges worldwide have been merging or forming tie-ups for several years, as they seek cost cuts and to broaden their product range and geographical reach to keep up with the expanding presence of their clients.

In October the LSE—which has been targeted by Nasdaq, Deutsche Boerse and Australia’s Macquarie—announced a joint venture with the Tokyo Stock Exchange to introduce the UK’s junior market in Asia.

Within Asia itself, Tokyo has bought a 5 percent stake in Singapore Exchange Ltd, and the Singapore exchange is seeking partners in India and Malaysia.

Separately, Wu said he was hopeful the Taiwan exchange could be upgraded to developed-market status next year by global index compiler FTSE from advanced emerging market status now. Its promotion was rejected in September for the third consecutive time.

‘We hope the upgrade will be finalized in February,’ he said, even though official announcements will come later in the year.

An upgrade would attract more buying from funds benchmarked to the FTSE indexes, and would increase the chances of larger index compiler MSCI Barra following suit, analysts said.

The TSE is in the midst of a reorganisation that would see it merge with three smaller exchanges in Taiwan to form a single holding company, which would then make an IPO in Taiwan.

The plan, already approved by the cabinet but awaiting legislature approval, is designed to boost the its compeitiveness among global stock exchanges by giving it greater scale.

Wu said stocks traded on the TSE had a combined market capitalisation of US$672 billion at end of June, the 20^th biggest in the world, with foreign investors holding about T$7.8 trillion ($241 billion) worth of Taiwan stock.