The Taiwan Stock Exchange is working on improving a key trading system popular among retail investors and planning longer trading hours to attract more demand, the bourse’s chairman said.
The exchange is studying ways to optimize the so-called odd-lot transactions mechanism, which caters to trades involving less than one standard unit of shares and is heavily used by the island’s individual investors, the bourse’s chairman Sherman Lin said in an interview on Thursday in Taipei.
Reforms under consideration include moving the start time of such trades ten minutes earlier to 9 a.m. to match the market’s regular trading hours, Lin said, adding that the bourse is also mulling shortening the current five-second order matching cycle.
“Our goal is to complete odd-lot trading reforms by year-end through actively working with securities firms,” said Lin. “Retail investors play such a big role in Taiwan’s market. We must safeguard their interests.”
Having risen about 50% this year, Taiwan’s stock market has emerged as one of the world’s top performers, fueled by demand for the popular AI trade and a surge of buying by retail investors. Already at a record high, the market recorded another milestone by surpassing India’s this month to become the world’s fifth largest.
The exchange is also discussing with brokerages to extend the market’s regular trading hours of 9 a.m. to 1:30 p.m., he said, without offering a specific timeline. “Extending trading hours may take more time to implement, as the process is relatively complex,” he added.
Equities bourses around the world have embarked on a trend to lengthen trading hours to better capture investor flows. For example, South Korea’s main stock exchange plans to extend its business hours to 12 a day this year from the current 6.5 hours.
Despite the strong rally, Taiwan’s tech-heavy stock market remains undervalued compared with its global peers, Lin said.
The benchmark Taiex index trades at around 20 times forward earnings, versus the Nasdaq 100’s 25 times.
Lin highlighted Taiwan’s unique strength in hosting the entire semiconductor supply chain. “We are not selling one single company, we are selling the whole supply chain,” he said, adding that foreign investors should recognize a “supply chain premium” as more firms demonstrate management depths and strategic value.
The exchange is urging listed companies to step up investor communications and lay out their medium- and long-term strategies to help unlock value, according to Lin.
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