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S. Korea to launch 2 cross-border indices with Taiwan in Q3

2017/03/20 17:51

SEOUL, March 20 (Yonhap) -- South Korea's stock market operator said Monday that it has agreed with its Taiwanese index and information services provider to launch two cross-border indices later this year.

Korea Exchange (KRX) said it is set to co-compile the IT Sector Index and the Dividend Theme Index with Taiwan Index Plus, a wholly-owned subsidiary of the Taiwan Stock Exchange.

The two sides agreed to launch the IT Sector Index and Dividend Theme Index in the third quarter of this year, the local bourse operator said.

Korea Exchange said the joint indices will be the first set in its new cross-border index series, which will track the performance of shares in South Korea, Taiwan, and other countries in the Asia-Pacific region.

It added a renowned global index provider may join as a partner in the plan to make the joint indices globally competitive, the KRX said, without elaborating.

"The new indices aim to cater to more diversified investment products and better services, bringing mutual prosperity to the Korean and Taiwanese capital markets," it said. "The indices have been designed to serve as an underlying for investable index-linked products, such as exchange-traded funds and derivatives, as well as a benchmark for actively managed cross-border funds."

   The IT Sector Index seeks to track returns on the top performing stocks from the IT sectors of South Korea and Taiwan. The Dividend Theme Index seeks to track companies with a history of increasing dividends over the past years.

The KRX and Taiwan Index Plus also agreed to attract other exchanges to participate in developing the Representative Index which will focus on the most representative stocks that have unique market characteristics inside participating Asian countries.

Korea Exchange said all the joint indices will be calculated in Korean, Taiwanese and the U.S. currencies.