Taiwan Stock Exchange
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The Taiwan Stock Exchange Corporation or TSEC was founded in the year, 1961. Although it started working as a Stock Exchange in 1962. Taiwan Stock Exchange Corporation has developed itself into an accomplished securities market since the day the Taiwan Stock Exchange Corporation was founded in 1961.The number of listed companies has grown by leaps and bound. In 1983 the number of listed companies was less than 120. By 2004 the number has become more than 670. According to the Taiwan government , the total market capitalization of these companies are around 13 trillion New Taiwan dollar by the middle of 2004.
There are 2 stock indexes in Taiwan Stock Exchange Corporation and they are:
- TWSE
- TAIEX
The Taiwan Stock Exchange corporation is the single exchange in Taiwan that deals through a centralized computer matching system. All the trading orders that are placed go through Taiwan Stock Exchange corporation licensed firms who have the sole permission to access this computer matching system. Apart from Taiwan Stock Exchange there is a couple of corporations more that deal with securities and future market in Taiwan. They are :
- ROC Gre-Tai Securities Market or the GTSM
- Taiwan Futures Exchange or the TAIFEX
Companies that are listed under GTSM normally do the trade over the counter by direct negotiation between the buyer and the seller,though in some cases it is done through the centralized computer matching managed by GTSM itself. The listing standards in the GTSM are more lenient compared to Taiwan Stock Exchange Corporation.
After the announcement of the Future Trading law was made in 1997 for the development of trading, stock options interest rate and many other things, the TAIFEX was established. As the government looks after the Taiwan Stock Exchange through SFB, other exchanges like GTSM and TAIFEX are not taken care of by the governmental organizations. Though these three stock exchanges deal in a very similar way.
The Taiwan Stock Exchange Corporation maintains a coalesced order limit book trading system which only accepts limit orders. The business hours in the Taiwan Stock Exchange are from 9:00 am to 1:30pm, and it remains open from Monday to Friday. Listed company shares are sold in round of 1000 shares lot. Orders with less than 1000 shares are considered as odd lots and orders more than 500,000 shares are considered as block trades.
The Taiwan Stock Exchange Corporation adjusts the limits of the daily range of price movements. The Taiwan Stock Exchange has set the percentage limit of around 7% more or less than the price of the previous trading day. The centralized computer system automatically declines those offers which goes past that limit. Though these limits can be modified under extreme market conditions by the FSC followed by the ROC government executive branch.
