The Taipei Exchange (TPEx) has introduced the TPEx 200 Index, which is an index of the price of 200 stocks of listed companies that have high liquidity and large market capitalization. The announcement ceremony was kicked off on March 27, 2019, in which the chairman of FSC, Wellington L. Koo, and the Director-General of SFB, Rosemary Wang, participated to celebrate the introduction of the highly anticipated index. The TPEx 200 index is aimed to be a key alternative reference for investors in making small and medium cap stock investments as well as for Securities Firms, Fund Managers, and FCMs to create index products. All the information of the TPEx 200 would be able to retrieve from the day of introduction through all stock information websites and APPs.
The TPEx 200 is weighted by float-adjusted market capitalization method and its selection process began with liquidity screening. Among liquidity selections, 200 stocks of TPEx 200 Index constituents were chosen by considering market capitalization and liquidity factors. The TPEx also pays attention to the representation and stability of the constituents. As a result, semi-conductor and biotech companies account for 56% of the total constituents. The correlation coefficient between TPEx 200 and TPEX is 0.993 and the TPEx 200’s market cap coverage of the TPEX is 71%.
In order to make the TPEx 200 easier for Securities Firms and Fund Managers to create linked products, TPEx sets the base date for the TPEx 200 Index on December 28, 2018 with a base value of 5000. In addition, the TPEx conducts evaluations of constituents and readjustments to the weight of stocks in the index every 3 months.
The new TPEx 200 Index intents to establish a reference efficiently tracking the TPEX as well as to become the representative index of Taiwan small and medium cap stocks. Moreover, the TPEx is looking forward to more index products in terms of equities and futures created based on the TPEx 200 for investors to consider while making investments.