Singapore to launch Taiwan index on Jan. 9

Singapore to launch Taiwan index on Jan. 9

SINGAPORE (AFP): Singapore authorities said yesterday they would launch on Jan. 9 options and futures contracts allowing investors to hedge against movements on the Taiwan stock exchange.

The Singapore International Monetary Exchange Ltd. (SIMEX) said a March 1997 contract would be the first to be listed on launch day.

Trading would begin 15 minutes before the opening and end 15 minutes after the close of the Taiwan stock market.

Compiled by Morgan Stanley Capital International (MSCI), the MSCI Taiwan Index will include 77 component stocks covering 67 percent of the Taiwan stock market, the SIMEX said in a statement.

The index will join the established Nikkei 225 contracts on SIMEX, the world's first exchange to list a futures contract linked to the Japanese stock market.

SIMEX said the new index would have "an almost 100 percent correlation" with the Taiwan All Share Index.

The contracts will be traded via SIMEX's open outcry system. SIMEX said the contracts would provide investors interested in the Taiwan bourse "excellent trading and hedging opportunities."

It would also cater to international investors currently unable to access the bourse.

The Taiwan stock market is the fourth largest in Asia in terms of capitalization and is known for its volatility and liquidity.