Taiwan's stock trading system is under review after a surge in semiconductor shares lifted the market to the world's fifth-largest. The Taiwan Stock Exchange (TWSE) is moving to advance the start time for odd-lot trading and extend regular trading hours as part of a broader push to attract retail investors.
According to Bloomberg on Tuesday, TWSE Chairman Sherman Lin said the exchange is reviewing measures to improve its odd-lot transactions system, which allows the buying and selling of shares in units of less than one share.
One proposal under consideration would advance the start time for odd-lot trading by 10 minutes to 9 a.m., aligning it with the opening of the regular session. The exchange is also discussing shortening the automatic order matching cycle, which currently stands at five seconds. "Our goal is to work closely with brokerages to complete the odd-lot trading reform within the year," Lin said. "Given the large share retail investors hold in Taiwan's market, we must protect their interests."
The reform package also includes a plan to extend regular trading hours, currently 9 a.m. to 1:30 p.m. However, Lin said extending trading hours involves a relatively complex process and could take more time to implement, without offering a specific timeline, Bloomberg reported. The Korea Exchange is also pursuing a plan to expand trading hours to 12 hours a day.
Taiwan's stock market has risen about 50% this year, setting record highs in succession. The boom in semiconductor stocks, including the world's largest foundry, TSMC, has driven the new records. As of the 26th, Taiwan's market capitalization stood at $4.95 trillion, surpassing India to become the world's fifth-largest market, according to Bloomberg.
"We are not selling one company; we are selling the entire supply chain," Lin said, emphasizing the strength of Taiwan's tech-heavy stock market. The 12-month forward price-to-earnings ratio (PER) of Taiwan's TAIEX index stands at about 20 times, lower than the Nasdaq 100 index at 25 times.
The TAIEX climbed to an intraday high of 44,818.25 the previous day before closing at 44,256.8, up 1.68% from the previous session. Major power and semiconductor component stocks led the gains after Nvidia CEO Jensen Huang, visiting Taiwan, mentioned rising power demand for Nvidia.
