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Eurex acquires 5% stake in TAIFEX
Taiwan News, Staff Writer
2014-03-26 01:51 PM
On Tuesday, the Investment Commission, MOEA approved the acquisition of a 5% stake in the Taiwan Futures Exchange (TAIFEF) by the Eurex Group (Eurex) at NT$97.5 per share totaling NT$1.38 billion. TAIFEF states that it is currently assessing matters related to holding Eurex shares and both exchanges are expected to take a mutual stake.

TAIEX Futures and TAIEX Options Contracts will begin listing on Eurex on May 15. TAIFEX president Peter Chiu states that Eurex’s holding in TAIFEX is an affirmation and recognition of TAIFEX’s long-term development potential.

Chiu asserts that Eurex is willing to acquire a 5% stake due to the current volume of TAIEX Futures and TAIEX Options products being ranked 6th globally among index futures and 3rd among Asian futures markets.

In December of last year, TAIFEX partnered with Eurex to both list TAIEX Futures and TAIEX Options on the world’s second largest exchange Eurex and for Eurex to confirm a stake in TAIFEX. With an approximate 5% stake in TAIFEX, Eurex becomes the first foreign exchange to invest in one of Taiwan’s three major exchanges.

Investment Commission executive secretary Emile Chang states that mutual holdings by major international exchanges has become a trend whereby exchanges mutually increase internationalization. This case is not only the first time an overseas exchange had taken a stake in a Taiwanese exchange, it is also the first time a peripheral securities organization was held by foreign capital.

Chiu emphasized that TAIFEX is currently assessing the future acquisition of Eurex shares but has yet to plan the holding proportion and amount. Mutual holdings between exchanges not only enhance working relationships, shareholder status also affords an understanding of exchange operating conditions and development direction. There will be a concrete determination regarding the Eurex matter by the end of March at the earliest.

After TAIEX Futures and TAIEX Options Contracts list on Eurex on May 15, Eurex’s over 30 trading countries and more than 400 trading members will help enhance the volume and activity of Taiwan’s futures products in global markets. In the future, the options trading session of these two futures indexes will be extended to 18 hours to attract foreign investment.

According to the Economic Daily News, Eurex’s 5% stake was purchased from Yuanta Group. Due to its stake in TAIFEX exceeding the statutory limitation of 5% after the merger of Polaris Securities and Polaris Futures with Yuanta Securities and Yuanta Futures, Yuanta Financial Holdings was required to divest itself of the outstanding TAIFEX shares.

Yuanta Securities and Yuanta Futures sold a total of 12.92 million shares at US$3.30 per share. The transaction amount in terms of the New Taiwan Dollar is NT$1.38 billion with a gain on disposal of NT$1.11 billion.

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