Gre Tai Securities Market (GTSM), Taiwan's over-the-counter (OTC) Exchange and Reuters, the global information company, today launched the new 10-Year Government Bond Benchmark Index.
GTSM has chosen Reuters as its partner to build the index which will serve as the first market benchmark reference for the government bond sector in the region.
From the total trading volumes and average yields derived from the electronic trading system of GTSM, the benchmark government bond index will be calculated using volume-weighted average methodology. This means the weighting of each index constituent will be determined by its traded volume - the more actively traded a bond issue, the higher its index representation.
GTSM Chairman Dr. Lee Yung San, said: "Introducing the index will support growing efforts to develop domestic financial markets in meeting international standards. At the same time, it will increase the bond market's capitalization and strengthen the foundation of Taiwan's bond market to prepare for globalization. We are very pleased to partner with Reuters, a reputable international company to provide an effective bond trading index and platform with credible market indicators and news for the professional trading community.
David Becker, Asia Head of Treasury and Fixed Income, said: "GTSM is at the forefront of internationalizing its OTC exchange and we are working closely with them to ensure they have the best resources in content, data and design to succeed. From this index, investors will be able to watch the Taiwan bond market trends and use it as a trading reference in the futures market. Ten-year government bonds are the most actively traded issues in Taiwan's bond market, usually accounting for 60%-70% of daily turnover. This index will boost market capitalization for the exchange in the future."