| Summary: | 碩士 === 國立臺灣大學 === 商學研究所 === 97 === The purpose of this research is to study the feasibility of developing the real estate index, Phalaenopsis, and ABS resin markets into futures products in Taiwan. In the research, we distinguish the factors of successful futures contracts into “Factors of spot market” and “Factors of contracts” from past studies. The spot market characteristics include: large scale, spot price volatility, information disclosure, large deliverable supply, ability to store spots, ability to easily classify and measure spots with high homogeneity, and the notion that spots are parameterized as the basic goods, and not the manufactured product. The main characteristics of contracts include: good risk-reduction ability, no other substitute contract in the market, the contract design is able to conform to the demand of the market participants, and the futures exchanges and the spot markets are in the same district.
Our research uses the same structure as in chapters 3, 4 & 5 to conduct the analysis. We begin with a review of the current spot market in Taiwan, followed by an analysis of the success and failure of similar futures products in other countries. Next, we compare the three products with the “Factors of spot market” in past studies and discuss their economic benefit. Lastly, we make the following conclusions and suggestions in chapters 6.
1. Real estate index futures: The latest home-price data show that the Taiwanese real estate market has been hit hard by the current economic downturn. This sharp decrease in housing trade volume will diminish the market participants’ need to look for ways to hedge. In addition, because the level of the Taiwanese real estate market information disclosure and transparency is low, this information asymmetry causes the markets to become inefficient and to thus decrease trade volume. Lastly and as for the futures target, the Taiwanese real estate indices are not sufficiently real-time. Based on the above reasons, we conclude that Taiwan should not hurry into launching a real estate index futures product at this time.
2. Phalaenopsis futures: Taiwan has a stable spot market. The incubation period of Phalaenopsis is long, and the risk is high, so the market participants have hedge demand. Although Taiwan is in a good position to develop Phalaenopsis futures, but the characteristic of Phalaenopsis make it not proper to be the futures target. The level of the Phalaenopsis market information disclosure and transparency is low. Farmers are also not familiar with derivative financial products. Based on the above reasons, we conclude that Taiwan should not launch a Phalaenopsis futures product at this time.
3. ABS resin futures: Taiwan plays a vital role in ABS resin supply chains with Taiwan being home to more than one-third of the world''s upstream material production capacity. As for the downstream manufacturers, hundreds of Taiwanese mold manufacturers, machinery corporations, and component providers make products in China. As far as market demand is concerned, the “Chinese Government''s Consumer Electronics Subsidy Program” increases the demand of ABS resin, which provides Taiwan a stable base for the spot market. At the same time, ABS resin is equipped with success factors of futures as mentioned above. Therefore, the result of our analysis shows that Taiwan is in a good position to develop ABS resin futures. To ensure successful development of the futures, we also suggest Taiwan Exchanges work on the contract design and marketing and propose the ABS resin futures contract specifications. In addition, Taiwan Exchanges should choose the “General Purpose Grade” product as the target, adopt cash settlement, use $NTD as the price quotation base, set 300~350 NTD/Ton as minimum price fluctuation (Tick), and set 5 or 10 tons as the contract size to fit the spot market trading usage. Lastly, adjustments for the contract specifications need to be made to fit the spot market so the ABS resin futures product can be successful in the market.
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