1

Impact of Tick-Size Reduction on the Price Clustering:

Evidence from the Emerging Order-Driven Market


Tzung-Yuan Hsieh (Corresponding Author)
Department of Finance, MingDao University, Taiwan
369 Wen-Huan Rd., Peetow, ChangHua, 52345, Taiwan, R.O.C.
Tel: 886-4-8876660
E-mail: tyhsieh@mail2000.com.tw

Ching-Chung Lin
Department of Business Administration, Kao Yuan University, Taiwan
1821, Chong-Shan road, Lujhu Township, Kaohsiung County, Taiwan 821
Tel: 886-7-6077070
E-mail: cclin@cc.kyu.edu.tw

Li Cheng
Department of Accounting, Providence University, Taiwan.
200 Chung Chi Rd., Shalu Township,Taichung Country, 43301, Taiwan.
Tel: 886-4-26328001
E-mail: amychengli@hotmail.com


Abstract
This paper investigates the effect of tick-size reduction on price clustering in the Taiwanese
Stock Market. The empirical results show that zero is the most favored, followed by five, and that
the even numbers are more preferred than the odd numbers. Because these phenomena still exist
even after tick-size reduction, price clustering can be ascribed to the natural preference for specific
numbers rather than to the market structure, which supports the attraction hypothesis. Further, the
intraday price clustering during the first 30 minutes is the largest, exhibiting an L-shaped pattern.
Besides, after tick-size reduction the degree of price clustering increases and the increases in
intraday price clustering during the first 30 minutes are the largest. Finally, in both the pre-reduction
or post-reduction period, stock price is the most important variable in explaining price clustering,
which supports the price resolution hypothesis.
JEL Classification: G14; G15
Keywords: Intraday pattern; Order-driven market; Price clustering; Price resolution hypothesis;
Tick-size reduction.
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1. Introduction
Price clustering is the phenomenon in which the last digit of a price tends to occur at specific
numbers. Generally, in efficient markets, the last digits of price should exhibit a uniform
distribution (Niederhoffer, 1966) and, hence, price clustering should not exist. However, the
empirical evidence all indicates that there indeed exists a significant price clustering in each market
(Ap Gwilym et al., 1998; Hameed and Terry, 1998; Huang and Stoll, 2001; Brown et al., 2002;
Chung et al., 2004; Chung et al., 2005; Ahn et al., 2005; Ohta, 2006; Ascioglu et al., 2007), and that
the stock prices ending with zero or even numbers are the most popular.
There are four main hypotheses to explain such results. First, the price resolution hypothesis
proposed by Ball et al. (1985) indicates that investors will quote specific numbers when they face
greater uncertainty about an assets price. Further, Harris (1991) extended the price resolution
hypothesis, providing four variablesstock price, volatility, market value, and number of
tradesas the proxies of the degree of reservation price dispersion. Harris indicated that, because
of the larger spreads, price clustering was the result of the trade-off between the reduced negotiation
costs and the losses. This is the negotiation hypothesis. Next, the attraction hypothesis (Goodhart
and Curcio, 1990) indicated that the investors usually quote specific numbers because of their
specific preferences. Finally, the collusion hypothesis proposes that dealers or market makers may
collude to quote the even numbers in order to get larger profits (Christie and Schultz 1994).
Many empirical studies try to explain the price clustering phenomenon. One key explanation is
information uncertainty, and four proxiesmarket value, stock price, return volatility, and trading
activityare normally used to evaluate the information uncertainty (Harris, 1991; Brown et al.,
2002; Ascioglu et al., 2007; Ikenberry and Weston, 2008). For example, Ascioglu et al. (2007)
found that there exists no significant monotonic relationship between price clustering and
information uncertainty in the Tokyo Stock Exchange (TSE), which provides less evidence on the
price resolution hypothesis but supports the attraction hypothesis. Next, Ikenberry and Weston
(2008) found that their results supported the negotiation hypothesis before the decimalization but
failed to explain these phenomena afterward. Further, Brown et al. (2002) indicated that a stock
price ending with zero is the most popular, followed by a preference for five, which also supports
the attraction hypothesis (Aitken et al., 1996). Although there are many hypotheses that attempt to
address price clustering, there are no consistent explanations. Therefore, it is still an empirical
question until now.
Most of previous studies have focused on quote-driven markets (e.g., Chung et al., 2004;
Ikenberry and Weston, 2008), so there is relatively less evidence on order-driven markets (Ahn et al.,
2005; Ascioglu et al., 2007). Ahn et al. (2005) indicated that there is an asymmetry in quoting
behavior in best bid and ask price in the Stock Exchange of Hong Kong (SEHK), while
short-selling trades in the SEHK are prohibited. Further, Ascioglu et al. (2007) found that there
exists a specific strategic quoting behavior in the TSE, indicating that sellers (buyers) usually quote
the price one tick under (above) the zero or five to get the price priority, which is consistent with the
findings of Ahn et al. (2005).
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Additionally, although many empirical studies found that price clustering exists in each market
(Ahn et al., 2005; Ascioglu et al., 2007), there only a few studies have focused on the intraday
pattern in price clustering (Ap Gwilym et al., 1998; Chueh, 2000; Schwartz et al., 2004; Ohta, 2006).
Ap Gwilym et al. (1998), Chueh (2000), and Schwartz et al. (2004) investigated the derivative
markets, while Ohta (2006) focused on the TSE. Despite the different markets, they all agreed that
the degree of price clustering is the largest near the market opening.
Further, in recent years, many exchanges have adjusted the tick size, but only a few studies
have explored the impact of tick-size reduction on price clustering (Chung et al., 2004; Ahn et al.,
2005; Chung and Shin, 2005; Chung et al., 2005; Ascioglu et al., 2007; Ikenberry and Weston,
2008). Ahn et al. (2005) investigated the effect of tick-size change on price clustering in the SEHK
and found that it increased (decreased) while the tick size changed from 0.1 (0.01) to 0.01 (0.1);
however, Ascioglu et al. (2007) found that there exists no monotone relationship between price
clustering and the tick size in the TSE. In addition, using the daily data in the Kuala Lumpur Stock
Exchange (KLSE), Chung et al. (2005) indicated that a larger tick size can lower negotiation costs,
thus reducing price clustering. On the Korea Stock Exchange (KSE), Chung and Shin (2005) also
found that the degree of price clustering is negatively correlated to tick size, indicating that the
smaller the tick size is, the more price clustering there will be. Finally, Chung et al. (2004) found
that in the New York Stock Exchange (NYSE) and NASDAQ price clustering exists in both the pre-
and post-decimalization periods, but they did not provide a conclusion about the effect of tick-size
change on price clustering. Later, using the F-test, Ikenberry and Weston (2008) offered the
conclusion that price clustering increased following decimalization.
This paper uses Taiwan Stock Exchange Corporation (TSEC) data to investigate whether price
clustering exists or not, and it should provide some contributions about the emerging order-driven
market, which are as follows. Firstly, unlike the TSE or the Stock Exchange of Hong Kong,
institutional investors occupy most parts; individual investors in TSEC occupy about 70% of
trading value, and the stock price is easily affected by rumors. Hence, Taiwanese stock market is
rife with the herding behavior. Next, because of the specific Chinese culture, the individuals are
prone to quote the specific final digits. For example, the individuals usually avoid using the final
digit 4 because the Cantonese pronunciation is similar to the phrase to die, with individuals
preferring the numbers 6 and 8 because the Cantonese pronunciation is similar to the meaning
to be lucky. Hence, price clustering in the TSEC is expected to be different from that of the other
markets because of the specific market structure and culture.
Further, many studies have investigated the effect of tick-size reduction on market quality (e.g.,
Gibson et al., 2003), but only a few studies provide empirical evidence about the impact of tick-size
reduction on price clustering (Chung and Shin, 2005; Chung et al., 2005; Ikenberry and Weston,
2008). The TSEC, an order-driven market without market makers, reduced the tick size on March 1,
2005, giving us an opportunity to examine the effect of tick-size reduction on price clustering in an
order-driven market. Further, due to the absence of market makers in the TSEC, there will be no
collusion between investors, and thus this paper can examine whether the price clustering is due to
the market structure or to natural preferences for specific numbers (Ahn et al., 2005; Ascioglu et al.,
4
2007). Additionally, this work investigates the effect of tick-size reduction on the intraday price
clustering. To our knowledge, there is no evidence about the effect of tick-size reduction on intraday
price clustering.
Summarizing the above discussions, the goals of this paper are as follows: (1) to investigate
whether price clustering can be explained by the price resolution hypothesis, (2) to examine
whether price clustering is due to market structure or natural preferences for specific numbers, (3)
to provide evidence about the impact of tick-size reduction on price clustering, (4) to investigate
whether specific intraday price clustering in the TSEC exists or not, and (5) to investigate the effect
of tick-size reduction on the intraday price clustering.
The results show that the zero and even numbers are the most popular in both the pre-period
and the post-period, showing that the phenomena of price clustering is due to the natural
preferences of investors rather than the trading mechanism. This empirical result supports the
attraction hypothesis. Further, the stocks with higher prices and greater volatility experience more
price clustering, while the stocks with large market values and those that are traded frequently
experience less price clustering. Hence, the price resolution hypothesis is supported (Ascioglu et al.,
2007). Next, the degree of price clustering increases after the tick-size reduction, which is
consistent with the previous findings on quote-driven markets (Ikenberry and Weston, 2008).
Finally, this work finds evidence that during the first 30 minutes the degree of price clustering and
the increases in price clustering are the largest.
The rest of the paper is organized as follows. Section 2 presents the institutional background,
and Section 3 presents the data, variable measurements, and descriptive statistics. Section 4 presents
the empirical results for the cross-sectional difference and the determinants of price clustering, and
Section 5 provides a conclusion.
2. Institutional Background
TSEC is an order-driven market without market makers, and therefore trading prices are
determined by investors. The public limit order is in fact the only type of order in the market and
adopts the rule of price-time precedence. In addition, TSEC adopts a multiple tick-size rule by
which tick sizes are different in different price ranges. The changes in tick sizes from pre-reduction
periods to post-reduction periods are as presented in Table 1.

Table 1. Tick-Size Rule before and after Tick-Size Reduction
Regime Tick size(NT$)
Pre-period price range (NT$)
(Relative tick size (%))
Post-period price range (NT$)
(Relative tick size (%))
Min Max Min Max
1 0.01 0 5 (0.20) 0 10 (0.10)
2 0.05 5 (1.00) 15 (0.33) 10 (0.50) 50 (0.10)
3 0.10 15 (0.66) 50 (0.20) 50 (0.20) 100 (0.10)
4 0.50 50 (1.00) 150 (0.33) 100 (0.50) 500 (0.10)
5 1.00 150 (0.66) 1000 (0.10) 500 (0.20) 1000 (0.10)
6 5.00 1000 (0.50) 1000 (0.50)
* The pre-period runs fromSeptember 1, 2004 to February 28, 2005, while the post-period runs from
March 7, 2005 to August 31, 2005.
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The orders are fed into the computerized trading system at 8:30 a.m. but are not executed until
trading begins at 9:00 a.m. The opening price is determined as that at which the maximum number
of bids and asks can be matched. Concerning the closing price, all orders are accumulated in an
order book during the pre-closing period from 13:25 p.m. to 13:30 p.m., with the closing price
determined by means of a call auction at 13:30 p.m. In spite of the trading process, the order and
trading information for the best five unexecuted quotes is revealed to the public on a real-time basis
using an electronic screen.

3. Data, Variable Measurements, and Descriptive Statistics
3.1 Data
The transaction and quote data are from the Taiwan Economic J ournal (TEJ) database and only
include ordinary shares. The information collected includes the trading price and the five best bid
and ask quotes with their matching trading volumes. In this paper, the degree of price clustering in
the TSEC is investigated during a sample period from September 1, 2004 to August 31, 2005, for a
total of 244 trading days. The adjustment of tick size was implemented on March 1, 2005, and data
from that date through March 6, 2005 are excluded in order to avoid any unusual trading behavior.
The pre-reduction period (hereinafter referred to as the pre-period) is from September 1, 2004 to
February 28, 2005, while the post-reduction period (hereinafter referred to as the post-period) is
from March 7, 2005 to August 31, 2005. The numbers of trading days for the two sub-periods are
120 and 124, respectively.
The samples are collected based on the following exclusion criteria: (1) only common shares
that were delisted or that experienced stock splits or temporary trading halts over the sample period
are used; (2) stocks for which the highest or lowest price underwent a price change from one
tick-size regime to another during the study period are used, as are stocks for which the daily
number of transactions was fewer than ten; (3) the trades for which the best quote had a missing
value or for which the spread was negative are used, and (4) the trades after 13:25 are used. After
satisfying the above criteria, the sample sizes of the Group 1 (the tick size changed from 0.05 to
0.01), Group 2 (the tick size changed from 0.1 to 0.05) and Group 3 (the tick size is 0.05) are 45,
147, and 25, respectively (The ticker symbols have been added in Appendix 1 on page 22).
3.2 Variable Measurements
3.2.1 Price Clustering
The proportion of each final digit (
i
P
) is defined as
total i
NS NS / , where NS
i
is the number of
shares in final digit i, and NS
total
is the sum of number of shares across all final digits. Additionally,
in order to investigate whether price clustering increases or not after a tick-size reduction, the
Standardized Clustering (SC) measure proposed by Chung & Shin (2005) is used in this work. The
stocks for which the tick size was 0.05 have the two possible last digits 0 and 5, while the stock
prices for which the tick size was 0.01 or 0.1 have one of the ten possible last digits 0 to 9. The SC
is obtained according to the following stages (in this work, the trading price is used to calculate the
degree of price clustering). For stocks with a 0.05 tick size, the SC equals the proportion of stock
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price ending with 0, while for stocks with 0.01 or 0.1 tick sizes the SC equals the proportion of
stock price ending with 0 or 5 times 2.5 (If the numbers for the possible final digit are two (ten), the
proportion of sock price ending in 0 (0 or 5) is used as the measure of SC. If the final digits follow a
uniform distribution, the value of SC should be 0.5 (0.2). In order to give stocks with a different tick
size the same scale, the scale factor 2.5 (0.5/0.2) is used.). Moreover, the measure of changes in
degree of price clustering is defined as ) / ln( , , pre i post i SC SC SC= , where post i SC , denotes the post-period
measures of stock i.
The pre- and post-period means are obtained by averaging the estimates of each stock across
all stocks. Besides, to compare the effect of a tick-size reduction on the intraday pattern, each
trading day is partitioned into nine successive 30-minute intervals, and the averages of each stock
during each interval are then calculated across the pre- or post-period. Further, the averages of each
interval are averaged across all stocks during the pre- or post-period.
3.2.2 Stock Characteristics
In order to explore whether the price clustering can be explained by the price resolution
hypothesis, the following four independent variables (Harris, 1991; Ahn et al., 2005; Ohta, 2006)
are included in our analysis: stock price (P); market capitalization (MV); number of trades (T), and
stock return volatility ( ). In general, the measure is obtained based on the following methods.
With the exception of stock return volatility, the pre-period or post-period estimates for each stock
are obtained by averaging the estimates across pre-period or post-period trading days. Concerning
volatility, pre-period (post-period) volatility is obtained by calculating the standard deviation of
stock returns across the pre-period (post-period) trading days. Finally, the pre-period (post-period)
means are obtained by averaging the means of each stock across all stocks.
Harris (1991) indicated that investors usually quote round numbers for high-priced stocks in
order to reduce the negotiation costs. Latter, Ahn et al. (2005) also supported the findings. Further,
volatility reflects the level of uncertainty about an assets intrinsic value. When the assets have
greater volatility, investors will have larger dispersions about the price of the underlying assets.
Similarly, stocks that trade infrequently will have greater information uncertainty, and so investors
will usually quote round numbers, leading to more price clustering (Ball et al., 1985; Harris, 1991).
Finally, firms with large market values are usually more attractive to investors and analysts (Harris,
1994). Hence, large firms will have less information uncertainty compared with the small firms,
leading to less price clustering.
Consequently, we expect that the volatility and stock price will be positively correlated with
the degree of price clustering, but the market value and trading activity will be negatively correlated
with the degree of price clustering. If the empirical results support the above expectation, the price
resolution hypothesis is supported.
3.3 Descriptive Statistics
The results of stock characteristics, presented in Table 2, show that after the 2005 tick-size
reduction the stock characteristics in the event groups decrease, especially in Group 1, but increase
in the control group. Further, the magnitudes of declines in Group 1 are larger than those of Group 2;
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however, in Group 2 only stock return volatility experiences a significant decrease, while the other
variables do not. Moreover, the relative tick size, which is the tick size divided by the stock price,
decreases after the tick-size reduction, which the magnitudes of decrease in Group 1 are the largest,
followed by those in Group 2, and the least are in Group 3.

Table 2. Descriptive statistics of stock characteristics
Group 1 Group 2 Group 3
Pre Post Diff (%) Pre Post Diff (%) Pre Post Diff (%)
Relative tick size (x10
-3
) (NT$) 6.26 1.49 -143.87** 3.56 1.89 -64.50** 3.99 3.70 -7.10**
P (NT$) 7.95 6.78 -16.26** 23.88 23.52 -2.21 11.60 12.62 9.04**
MV (million NT dollars) 4389.74 3473.92 -16.11** 33937.96 33470.08 -1.70 6669.37 7052.74 8.42**
T (trades) 491.39 302.93 -47.56** 1408.55 1119.07 -10.58 381.81 528.70 27.92
(%) 2.13 1.88 -13.81** 1.91 1.81 -6.67** 1.52 1.81 9.00
Sample size (n) 45 147 25
Note:
1.* and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Because the results follow the normal distribution, the null hypotheses where the differences in stock characteristics are significantly
different from0 are tested by the t-tests here.
3. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to
0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.

4. Empirical Results
Section 4.1 presents the summary statistics regarding the degree of price clustering, and
Section 4.2 discusses the impact of tick-size reduction on price clustering. Finally, the regression
results are shown in Section 4.3.
4.1 Summary Statistics
(a) Before (After) the Tick-Size Reduction
Table 3 shows the proportion of quotes ending with the possible final digits for trade price, bid
price, and ask price. The results show that zero is the most popular number, following by quotes
ending with five. Furthermore, the null hypothesis, which states that the proportion of even numbers
is greater than 0.5, is tested. The results show that the even numbers are much more preferred by
investors in both the pre- and post-period. Next, the goodness-of-fit test (D-measure) is used to
examine whether price clustering exists or not. The results show that the distribution of last digits
does not follow the uniform distribution, indicating that price clustering exists in the TSEC.
Summarizing the above discussions, price clustering exists in the TSEC, and zero is the most
popular ending digit, followed by five. In addition, the even numbers are more popular than the odd
numbers. These results with regard to price clustering in the TSEC are consistent with previous
studies of quote-driven markets (e.g., Ascioglu et al., 2007), and they also provide some evidence of
price clustering in order-driven markets.


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Table 3. Descriptive statistics of price clustering before and after the tick-size reduction

(b) The Intraday Pattern
In Panel A of Table 4, the results show that all of the proportions of even numbers are larger
than 50% in each sub-interval, indicating that investors prefer even numbers more. Besides, during
each 30-minute interval, the number zero is still the most popular, even after a tick-size reduction
(the results are omitted for the sake of brevity but are available upon request). Thus, the results
show that price clustering in the TSEC is based on natural preference rather than on the market
structure, which supports the attraction hypothesis.

Table 4. The intraday pattern of price clustering
Group Period 0900~0930 0930~1000 1000~1030 1030~1100 1100~1130 1130~1200 1200~1230 1230~1300 1300~1330
Panel A. The proportion of even numbers for trading price during the pre- (post-) period (%)
Pre 58.03 56.71 55.65 56.14 54.27 54.72 55.07 55.37 55.99
1
Post 57.41 55.97 55.44 55.47 55.26 54.86 55.24 56.22 55.29
Pre 52.52 51.65 51.75 52.09 52.01 51.32 51.97 52.40 52.23
2
Post 73.30 68.66 67.08 65.90 65.87 65.56 64.72 65.05 65.11
Pre 64.53 63.69 61.70 62.84 61.75 62.18 61.69 62.41 61.46
3
Post 62.20 59.60 58.62 58.88 59.22 58.11 57.71 58.21 59.33
Panel B. The standardized clustering (SC) during the pre- (post-) period (%)
Pre 58.03 56.71 55.65 56.14 54.27 54.72 55.07 55.37 55.99
1
Post 110.67 105.73 97.35 95.91 96.52 96.75 95.33 95.65 96.03
Pre 68.71 66.46 66.32 66.78 66.11 65.33 65.71 65.09 66.77
2
Post 73.31 68.66 67.08 65.90 65.87 65.56 64.72 65.05 65.11
Pre 64.53 63.69 61.70 62.84 61.75 62.18 61.69 62.41 61.46
3
Post 62.20 59.60 58.62 58.88 59.22 58.11 57.71 58.21 59.33
* Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to
0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.
Final Digits (%)
Even 0 1 2 3 4 5 6 7 8 9 D-measure
Bid 56.40** 56.40 43.60 40871**
Trade 56.19** 56.19 43.81 6777** Pre
Ask 57.76** 57.76 42.23 89769**
Bid 55.76** 25.16 9.69 9.48 7.5 5.71 14.96 8.71 6.3 7.54 5.25 1563688**
Trade 55.76** 24.69 8.42 8.63 7.66 6.65 15.31 7.74 6.61 8.06 6.23 1142932**
Group 1
Post
Ask 56.60** 26.72 5.74 7.62 7.42 7.28 16.22 6.50 6.34 8.49 4.67 1681129**
Bid 52.03** 16.22 8.94 8.94 8.74 8.14 12.60 8.78 8.51 10.12 9.00 1612152**
Trade 52.04** 14.74 9.13 9.63 9.22 8.99 11.96 8.99 8.70 9.69 8.95 735852** Pre
Ask 52.99** 16.30 8.53 9.40 8.79 9.00 13.37 8.46 8.10 8.23 8.82 2959793**
Bid 67.49** 66.75 33.25 140498**
Trade 67.49** 67.49 32.51 267248**
Group 2
Post
Ask 75.59** 68.46 31.53 1070823**
Bid 62.58** 63.96 36.03 17482**
Trade 62.58** 62.58 37.42 1813** Pre
Ask 69.78** 66.47 33.53 45976**
Bid 59.48** 58.09 41.09 871**
Trade 59.48** 59.48 40.52 918**
Group 3
Post
Ask 66.62** 60.70 39.30 15478**
Note:
1.* and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to
0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.
3. The D-measure proposed by Ikenberry & Weston (2008) is defined as follows: (

=

n
i
i i i
E E O
1
2
/ ) (
, where O
i
(E
i
) is the
observed (expected) level of price clustering in final digit i, and n is the number for the final digits (n is 2 or 10)).
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Furthermore, the SC values of the pre- and post-period are presented in Panel B of Table 4.
After longer non-trading periods, the investors usually face greater information uncertainty, and
therefore the risk near the market opening will be large. Investors usually quote round numbers
when they face greater uncertainty (Harris, 1991). So the intraday price clustering in the event
groups exhibits an L-shaped pattern, consistent with Ohtas (2006) findings, indicating that the
values are large at the beginning of the day and then gradually decline, especially for Group 1.
Besides, the SC values in the event group increase from the pre-period to the post-period, with the
SC values in the control group exhibiting the opposite movements. This results show that the
tick-size reduction leads to an increase in price clustering, especially for Group 1.
4.2 The Effect of a Tick-Size Reduction on Price Clustering
(a) Before (After) the Tick-Size Reduction
The degree of price clustering during the pre- or post-period and the impact of a tick-size
reduction on price clustering are presented in Table 5. The results show that after a tick-size
reduction the mean SC in the event groups increases, especially for Group 1. However, the mean SC
in Group 3 exhibits the opposite results. Hence, the smaller tick size may lead to an increase in price
clustering. (We also use stocks for which the observations that are within the same price regime. For
example, if the price of stock A ranges from $7 to $12, which covers two tick size regimes. We use
a subset of observations for stock A, such as when its price is in one tick regime: between $7 and
$10. The results are the same with the samples in our work, and while these are omitted for the sake
of brevity, they are available upon request).

Table 5. The impact of tick-size reduction on the price clustering
SC (%) SC (%)
Group Pre-Period Mean Post-Period Mean Max Min Median Mean (+/-) F-measure n
1 56.19 96.99 96.87 35.98 56.77 ** 56.87 ** 45/0 2.34 45
2 66.75 67.49 34.84 -107.44 8.85 ** 4.50 ** 114/33 0.04 147
3 62.58 59.48 12.85 -55.85 -1.59 -4.56 10/15 0.5 25
Note:
1. * and ** denotes statistically significant at 5% and 1% levels, respectively.
2. n denotes sample size.
3. +(-) represents the number of stocks for which SC is greater (less) than 0.
4. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to
0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.
5. Using the Shapiro-Wilk test or the Kolomogorov-Simirnov test, this study confirms that the changes of price clustering in Group 1 and 2
do not follow the normal distribution (p-value<0.01), while the changes of price clustering in Group 3 follow normal distribution
(p-value=0.1746). However, the conclusion about the effect of tick-size reduction on price clustering is not affected by the results of
normality tests because the results for the mean test are the same as those for the median test.
6. The F-test adopted by Ikenberry and Weston (2008), which is used to determine whether price clustering decreases or not after
decimalization, seems inappropriate in determining whether price clustering exists or not. The key problem is how to build the
hypothesis, and so the results are only presented but will not be discussed in later analysis. Finally, the possible final digits in the studies
of Ikenberry and Weston (2008) always change monotonically from8 to 10. However, the possible final digits in TSEC change from10
to 2 (or 2 to 10), which do not monotonically change.

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Further, the mean change in standardized clustering ( SC ) is used to test whether the tick-size
reduction can reduce price clustering or not. While all stocks in Group 1 experience a positive
increase in SC after tick-size reduction, only ten stocks in Group 3 experience an increase in SC .
The mean SC for Group 1 and 2 are 56.87% and 4.50% respectively, while the mean SC for
Group 3 is -4.56%. Moreover, the p-value in Group 1 is less than 1%, while the p-value in Group 3
is greater than 10%. Hence, the degree of price clustering in Group 1 increases after tick-size
reduction. Next, the degree of price clustering in Group 2 still increases after tick-size reduction. No
matter whether we use the t-test (mean) or the sign rank test (median), the results are all significant,
showing that the effect of tick-size reduction on price clustering also exists in other tick-size
regimes.
Next, in order to avoid the confounding effects, the samples are further partitioned into the
sub-samples based on their pre-period stock characteristics (This research only uses pre-period data
in order to avoid the endogenous problem), including market capitalization, number of trades, trade
size in shares, volatility, and binding constraint probability. Group 1 is classified into two
sub-samples, sub-groups L (low stock characteristics) and H (high stock characteristics), with
sample sizes of 22 and 23, and Group 2 which is partitioned into three equal sub-samples of 49 for
sub-groups L (low stock characteristics), M (medium stock characteristics) and H (high stock
characteristics). In Table 6, the results show that the degree of price clustering increases after a
tick-size reduction, especially for Group 1. Although some changes in price clustering in Group 2
are insignificant, nearly all values are positive. The results, which a tick-size reduction can increase
price clustering, are supported, and are consistent with previous findings (Ikenberry and Weston,
2008).
Table 6. Descriptive statistics classified by pre-period variables
Group 1 Group 2
Variables
L H L M H
Market capitalization 0.5988 ** 0.5399 ** 0.1059 ** 0.0110 0.0175
Number of trades 0.6133 ** 0.5260 ** 0.0623 * 0.0258 0.0463
Trade size in shares 0.5983 ** 0.5404 ** 0.0401 0.0540 0.0403
Volatility 0.5887 ** 0.5496 ** 0.0279 0.0648 0.0417
Binding-constraint probability 0.6119 ** 0.5274 ** -0.0259 0.0949 ** 0.0654 **
Sub-sample size (n) 22 23 49 49 49
Note:
1. *and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose
tick size changed from0.1 to 0.05. Group 3 consists of the stocks whose tick size remains the same (0.05)
in both the pre- or post-periods of tick-size reduction.
3. Sub-samples L andH in group 1 are classified by pre-period stock characteristics. The sample sizes are
classified into 22 and 23, respectively. Sub-samples L, M, and H in Group 2 are classified into equal
sample sizes of 49. The magnitudes of the values for the stock characteristics in H are the largest,
followed by M, with the least in L.

(b) The Intraday Pattern
11
In Table 7, the mean SC is used to examine the intraday pattern of changes of price
clustering. While all of the stocks in Group 1 experience increases after the tick-size reduction, only
about one-half of the stocks in Group 3 experience increases. The mean SC for each period in
Group 1 is positive, while that of SC in Group 3 is negative. Moreover, the p-values in Group 1
are less than 1%, while nearly all of the p-values in Group 3 are greater than 10%, indicating that
the degree of price clustering increases after a tick-size reduction (using the two-sample t-test, the
differences between the values for Group 1 and Group 3 are significantly different from 0, and the
results are omitted for the sake of brevity but upon request). Next, although only some SC values
in Group 2 insignificantly increase, they are all positive, demonstrating that the effect of tick-size
reduction on price clustering still exists in other price regimes. No matter whether we use the t-test
(mean) or the sign rank test (median), the above results still exist, indicating that after a tick-size
reduction the greatest increase indeed occurs near the market opening.

Table 7. The intraday pattern of changes in price clustering
Group Period 0900~0930 0930~1000 1000~1030 1030~1100 1100~1130 1130~1200 1200~1230 1230~1300 1300~1330
Mean (%) 63.60** 61.46** 55.29** 52.60** 56.55** 55.59** 54.12** 53.33** 52.60**
Median (%) 61.54** 60.76** 53.51** 52.64** 55.70** 53.50** 57.84** 53.94** 52.39** 1
(+/-) 45/0 45/0 45/0 45/0 45/0 45/0 45/0 45/0 45/0
Mean (%) 10.04** 7.47** 6.43** 2.52 3.73** 4.32** 3.08 4.03* 1.8
Median (%) 12.72** 12.60** 9.00 3.86 6.21* 5.99* 5.74 6.06** 3.78 2
(+/-) 116/31 107/40 104/43 85/62 94/53 88/59 88/59 93/54 85/62
Mean (%) -2.41 -6.03* -3.99 -6.16 -3.37 -6.10 -5.70 -6.10 -2.18
Median (%) 1.65 -7.11* -2.10 -2.01 2.12 -5.55 -6.27 -2.32 -1.58 3
(+/-) 13/12 6/19 11/14 11/14 14/11 8/17 8/17 9/16 10/15
Note:
1. * and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to
0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.
3. +(-) represents the number of stocks for which SC is greater (less) than zero.
4.3 Regression Analysis
(a) Before (After) a Tick-Size Reduction
In order to control the stock characteristics and consider the problems of multicollinearity
(nearly all the values of variance inflation factor are less than 3, and the results are omitted for the
sake of brevity, but are available upon request), the regression analysis of price clustering (X) on the
stock characteristics is performed, which is defined as

+ + + + + = ) MV ln( ) ln( ) T ln( ) P ln( X
4 3 2 1 0
, (1)

where P is the average stock price, T is the average number of trades,

is the standard deviation of
stock return, and MV is the market value. The results are shown in Table 8.
In Panel A of Table 8, the results show that in both the pre- and post-period the degree of price
clustering is positively correlated with the stock price, which supports the view that investors will
quote round numbers when they consider high-priced stocks (Harris, 1991). With respect to
frequently traded stocks, analysts and investors find them more attractive, and so they will have
more trading information about these stocks. Because of this, they will quote the stock price more
precisely, reducing the tendency to quote specific final digits, which means that frequently traded
stocks experience less price clustering. In addition, the firms with large market values are usually
12
more well-known to investors, and investors have less information uncertainty about these large
firms. Hence, the coefficients of market value are also negative, although insignificantly. Finally,
volatility is positively correlated with the degree of price clustering, which indicates that investors
will quote relatively specific round numbers when they face the greater information uncertainty. In
summary, the stock price is the most important factor in explaining price clustering. Although some
coefficients are insignificant, nearly all the results are consistent with prior expectations. Therefore,
the price resolution hypothesis is supported.

Table 8. The determinants of price clustering
Group X
0

1

2

3

4
Adj. R
2
(%)
Panel A. The regression analysis for SC on the stock characteristics
pre
SC 0.4991 ** 0.0513 * -0.0294 ** 0.0713 ** 0.0092 22.95
1
post
SC 0.4965 ** 0.2094 ** -0.0444 0.0699 -0.0374 56.58
pre
SC -0.3010 0.2183 ** -0.0156 0.0233 -0.0032 23.07
2
post
SC 0.4720 ** 0.1903 ** -0.0262 ** 0.0411 * -0.0260 72.95
pre
SC 0.2613 0.2521 0.0476 * -0.0835 -0.0573 4.59
3
post
SC 0.4406 ** 0.0918 * -0.0126 0.0521 -0.0035 32.79
Panel B. The regression analysis for SC on the pre-period stock characteristics
1 SC 1.1671 ** -0.3017 ** 0.0475 -0.0328 -0.0494 * 16.27
2 SC 0.9045 * 0.5895 ** 0.0280 -0.0855 -0.2035 * 49.23
3 SC 0.5179 -0.3026 -0.0860 0.1544 0.0707 2.21
Note:
1. * and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick
size changed from0.1 to 0.05. Group 3 consists of the stocks whose tick size remains the same (0.05) in both
the pre- or post-periods of tick-size reduction.
3. Coefficients in the regression analysis are adjusted by Whites correction.

In addition, in Panel B the regressions of price clustering changes on the pre-period stock
characteristics are used to investigate whether the changes in price clustering can be explained by
the stock characteristics. The results show that the stocks with large market values experience the
smallest increases in price clustering. As for the stock price, the high-priced stocks in Group 1
experience the smallest increases in price clustering, while the opposite result occurs in Group 2.
After controlling for the stock characteristics, the intercepts are still significantly positive,
indicating that the degree of price clustering indeed increases after a tick-size reduction.
(b) The Intraday Pattern
In Table 9, regression analysis using the GMM is applied to provide a statistical test regarding
the intraday pattern of price clustering. The regression equation is defined as

=
+ + =
8
1
, , , , 0 ,
t
k t k t
D
k t k k t
V
, (2)
where V
t,k
is the degree of price clustering for stock k at interval t, including the pre-period price
clustering (
pre
SC ), post-period price clustering (
post
SC ), and the change in price clustering ( SC ).
D
1
~D
8
are the dummy variables, which are defined as follows: D
1
equals 1 if the trading time is
between 09:30 and 10:00, and 0 otherwise; D
2
equals 1 if the trading time is between 10:00 and
13
10:30, and 0 otherwise; D
3
equals 1 if the trading time is between 10:30 and 11:00, and 0 otherwise;
D
4
equals 1 if the trading time is between 11:00 and 11:30, and 0 otherwise; D
5
equals 1 if the
trading time is between 11:30 and 12:00, and 0 otherwise; D
6
equals 1 if the trading time is between
12:00 and 12:30, and 0 otherwise; D
7
equals 1 if the trading time is between 12:30 and 13:00, and 0
otherwise; and D
8
equals 1 if the trading time is between 13:00 and 13:30, and 0 otherwise. The
intercept represents the average value during the period from 09:00 to 09:30, and the coefficients
for the dummy variables,
1
through
8
, measure the differences between the average value during
the respective 30-minute interval and the average value from 09:00 to 09:30. The t-test is used to
examine the null hypothesis which the mean difference is less than 0.

Table 9. Regression analysis -- intraday price clustering

0

1

2

3

4

5

6

7

8

Panel A. The intraday pattern for SC
pre
SC
0.5803** -0.0131 -0.0237* -0.0188* -0.0376** -0.0330** -0.0295** -0.0265** -0.0204*
Group 1
post
SC
0.4426** -0.0197 -0.0532** -0.0590** -0.0565** -0.0556** -0.0613** -0.0600** -0.0585**
pre
SC
0.2748** -0.0089 -0.0095 -0.0077 -0.0103 -0.0135 -0.0119 -0.0144 -0.0077
Group 2
post
SC
0.7330** -0.0464** -0.0622** -0.0740** -0.0743** -0.0774** -0.0859** -0.0826** -0.0819**
pre
SC
0.6145** 0.0307 0.0222 0.0023 0.0137 0.0029 0.0072 0.0023 0.0095
Group 3
post
SC
0.5933** 0.0286 0.0026 -0.0071 -0.0045 -0.0011 -0.0122 -0.0162 -0.0112
Panel B. The intraday pattern for SC
Group 1 SC 0.6360** -0.0214 -0.0831** -0.1100** -0.0704 -0.0801* -0.0948** -0.1026** -0.1100**
Group 2 SC 0.1004** -0.0257 -0.0360 -0.0751** -0.0631* -0.0572* -0.0696* -0.0601* -0.0824**
Group 3 SC -0.0217 -0.0023 -0.0384 -0.0180 -0.0398 -0.0119 -0.0392 -0.0352 -0.0392
Note:
1.*and ** denotes it is statistically significant at 5% and 1% levels, respectively.
2. Group 1 refers to the stocks whose tick size changed from0.05 to 0.01, while Group 2 the stocks whose tick size changed from0.1 to 0.05.
Group 3 consists of the stocks whose tick size remains the same (0.05) in both the pre- or post-periods of tick-size reduction.

The model is estimated respectively for each stock during the pre- or post-period. The table
gives the averages of the coefficients and their significances. Firstly, in Panel A, for both the pre-
and post-period, those of the intercepts are significantly positive while the coefficients of each
interval are negative, indicating that the degree of price clustering during the first 30-minute
interval is the largest, especially for Group 1. In Panel B, changes in price clustering are
investigated, with the results showing that the intercept coefficients are positive while the other
coefficients are negative, showing that the largest increases occur during the first 30-minute
interval.
The above results are consistent with the previous findings in Section 4.1 and 4.2, and thus
support the expectation that both the largest price clustering and the largest increase in price
clustering occur near the market opening.

14
5. Conclusions
In this paper, the trade and quote data are used to examine whether price clustering in the
TSEC exists or not. Also, the change in the tick-size rule implemented on March 1, 2005 is used to
investigate the impact of tick-size reduction on price clustering and on the intraday pattern of price
clustering. To our knowledge, this is the first study to investigate the impact of tick-size reduction
on intraday price clustering.
The analytical results show that the degree of price clustering increases after tick-size
reduction, which is consistent with previous findings (Chung et al., 2005; Ikenberry and Weston,
2008). In addition, tick-size reduction leads to the largest increase in price clustering during the first
30-minute interval, while the intraday price clustering exhibits an L-shaped pattern. Also, zero is the
most popular number for the ending digit in both the pre- and post-period. The results show that the
price clustering is based on the natural preferences of investors rather than on the market structure,
which supports the attraction hypothesis and is consistent with previous findings (Ahn et al., 2005;
Ascioglu et al., 2007). Besides, the degrees of price clustering are positively correlated with the
stock price and return volatility, but they are negatively correlated with the number of trades and
market value; some coefficients are insignificant, but they are consistent with the expected signs.
Therefore, the price resolution hypothesis is supported.
Summarizing the above, if the tick size is small, relative to the price level, prices tend to
cluster more since traders (dealers) gain little benefit from precisely evaluating stock price (Ohta,
2006). Therefore, the degree of price clustering increases after tick-size reduction no matter whether
it is in order-driven or quote-driven markets. Similarly, the impact on the call auction market and
the continuous auction market show the same results due to the relatively smaller tick size.

15
Appendix 1.
Group 1
Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm
1108 Lucky Cement Corporation 1504 Teco Electric & Machinery Co., Ltd. 1807 United Ceramics Co., Ltd. 2511 PrinceHousing & Development Corp.
1110 Southeast Cement Corp. 1512 J ui Li EnterpriseCo., Ltd. 1909 Long Chen Paper Co., Ltd. 2523 Der Pao Construction Co., Ltd.
1215 Charoen Pokphand Enterprise(Taiwan) Co. 1514 Allis Electric Co., Ltd. 2007 Yieh Hsing EnterpriseCo., Ltd. 2538 KeeTai Properties Co., Ltd.
1217 AGV Products Corp. 1603 ChinaWire& CableCo., Ltd. 2022 Tycoons Group Ent. Co., Ltd. 2546 KedgeConstruction Co., Ltd
1218 Taisun EnterpriseCo., Ltd. 1604 Sampo Corp. 2028 Wei Chih Steel Industrial Co., Ltd. 2601 First Steamship Co., Ltd.
1409 Shinkong Synthetic Fibers Co., Ltd. 1608 HuaEng Wire& CableCo., Ltd. 2359 Solomon Technology Corp. 2816 Union InsuranceCo., Ltd.
1417 Carnival Industrial Corp. 1702 Namchow Chemical lndustrial Co., Ltd. 2375 Teapo Electronic Corp. 2831 TheChineseBank
1444 LealeaEnterpriseCo., Ltd. 1712 Sinon Corp. 2381 ArimaPhotovoltaic & Optical Corp. 9907 Ton Yi Industrial Corp.
1452 Hong Yi Fiber Ind. Co., Ltd. 1714 Ho Tung Chemical Corp. 2390 EverSpring Industry Co., Ltd. 9911 Taiwan SakuraCorp.
1457 Yi J inn Ind. Co., Ltd. 1715 AchemTechnology Corp. 2466 COSMO Electronics Corp.
1459 Lan FaTextileCo., Ltd. 1724 T. N. C. Industrial Co., Ltd. 2479 Helix Technology Inc.
1460 Everest TextileCo., Ltd. 1806 Champion Building Materials Co., Ltd. 2504 Goldsun Devel. & Const. Co., Ltd.
Group 2
Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm
1101 Taiwan Cement Corp. 2106 KendaRubber Ind. Co., Ltd. 2499 Unity Opto Technology Co., Ltd. 3037 Unimicron Technology Corp.
1102 AsiaCement Corp. 2201 Yulon Motor Co., Ltd. 2501 Cathay Real EstateDevelopment Co., Ltd. 3061 FormosaEpitaxy Inc.
1303 Nan YaPlastics Corp. 2204 ChinaMotor Corporation 2524 King's Town Construction Co., Ltd. 4526 Tong-Tai Machine& Tool Co., Ltd.
1310 Taiwan StyreneMonomer Corp. 2301 Lite-On Technology Corp. 2536 Hung Poo Real EstateDevelopment Co., Lt 4532 Rechi Precision Co., Ltd.
1311 Taiwan PolypropyleneCo., Ltd. 2303 United Microelectronics Corp. 2545 Huang Hsiang Construction Corp. 5305 Lite-on Semiconductor Corp.
1402 Far Eastern TextileCo., Ltd. 2311 Advanced Semiconductor Engineering, Inc. 2547 RadiumLifeTech. Co., Ltd. 5469 HannStar Board Corp.
1451 Nien Hsing TextileCo., Ltd. 2324 Compal Electronics, Inc. 2548 Huaku Development Co., Ltd. 5471 Sonix Technology Co., Ltd.
1473 Tainan Enterprises Co., Ltd. 2325 SiliconwarePrecision Ind. Co., Ltd. 2603 Evergreen MarineCorp. (Taiwan) Ltd. 5484 Everfocus Electronics Corp.
1477 Makalot Industrial Co., Ltd. 2332 D-Link Corporation 2605 SincereNavigation Corp. 5534 Chong Hong Construction Co., Ltd.
1503 Shihlin Electric & Engineering Corp. 2347 Synnex Technology International Corp. 2606 U-Ming MarineTransport Corp. 5608 Shih Wei Navigation Co., Ltd.
1507 Yungtay Engineering Co., Ltd. 2352 QisdaCorp. 2609 Yang Ming MarineTransport Corp. 6004 YuantaCorePacific Securities Co., Ltd.
1520 Fu-Sheng Industrial Co., Ltd. 2355 Chin-Poon Industrial Co., Ltd. 2615 Wan Hai Lines Ltd. 6115 I-Sheng Electric Wire& CableCo., Ltd.
1522 TYC Brother Industrial Co., Ltd. 2360 ChromaAteInc. 2617 Taiwan Navigation Co., Ltd. 6128 General Plastic Industrial Co., Ltd.
1524 Gordon Auto Body Parts Co., Ltd. 2365 KYE Systems Corp. 2704 TheAmbassador Hotel Co., Ltd. 6136 Fullerton Technology Co., Ltd.
1531 Kaulin Manufacturing Co., Ltd. 2376 GigabyteTechnology Co., Ltd. 2801 Chang HwaCommerciai Bank, Ltd. 6141 Plotech Co., Ltd.
1532 ChinaMetal Products Co., Ltd. 2377 Micro-Star International Co., Ltd. 2807 Standard Chartered Bank (Taiwan) Limited 6168 Harvatek Corp.
1538 J enn Feng Industrial Co., Ltd. 2379 Realtek Semiconductor Corp. 2823 ChinaLifeInsuranceCo., Ltd. 6189 PromateElectronic Co., Ltd.
1710 Oriental Union Chemical Corp. 2385 Chicony Electronics Co., Ltd. 2836 Bank of Kaohsiung, LTD. 6257 Sigurd Microelectronics Corp.
1716 Yung Shin Pharmaceutical Industrial Co. 2393 Everlight Electronics Co., Ltd. 2845 Far Eastern International Bank 6269 FlexiumInterconnect Inc.
1722 Taiwan Fertilizer Co., Ltd. 2394 Premier ImageTechnology Corp. 2880 HuaNan Financial Holdings Co., Ltd. 6282 AcBel Polytech Inc.
16
1723 ChinaSteel Chemical Corp. 2401 Sunplus Technology Co., Ltd. 2881 Fubon Financial Holding Co., Ltd. 6289 ArimaOptoelectronics Corp.
1733 Apex Biotechnology Corp. 2403 Yosun Industrial Corp. 2884 E.Sun Financial Holding Co., Ltd. 9904 Pou Chen Corporation
1737 Taiyen Biotech Co., Ltd. 2404 United Integrated Services Co., Ltd. 2886 MEGA Financial Holding Co., Ltd. 9915 Nien MadeEnterpriseCo., Ltd.
1802 Taiwan Glass Ind Co., Ltd. 2405 ShuttleInc. 2887 Taishin Financial Holding Co., Ltd. 9917 Taiwan SecomCo., Ltd.
2002 ChinaSteel Corp. 2408 NanyaTechnology Corp. 2888 Shin Kong Financial Holding Co., Ltd. 9927 ThyeMing Industrial Co., Ltd.
2006 Tung Ho Steel EnterpriseCorp. 2411 Phoenixtec Power Co., Ltd. 2890 Sinopac Financial Holdings Co., Ltd. 9930 ChinaHi-Ment Corp.
2010 Chun Yuan Steel Industry Co., Ltd. 2417 AverMediaTechnologies Inc. 2891 Chinatrust Financial Holding Company Ltd 9933 CTCI Corporation
2015 Feng Hsin Iron & Steel Co., Ltd. 2418 YaHsin Industrial Co., Ltd. 2892 First Financial Holding Co., Ltd. 9937 National PetroleumCo., Ltd.
2020 Mayer Steel PipeCorp. 2428 Thinking Electronic Industrial Co., Ltd. 2908 Test RiteInternational Co., Ltd. 9939 Taiwan Hon Chuan EnterpriseCo., Ltd.
2023 Yieh Phui EnterpriseCo., Ltd. 2430 Tsann Kuen EnterpriseCo., Ltd. 3003 K.S. Terminals Inc. 9941 Taiwan AcceptanceCorp.
2027 TaChen Stainless PipeCo., Ltd. 2441 Greatek Electronics Inc. 3009 Chi Mei Optoelectronics Corp.
2029 Sheng Yu Steel Co., Ltd. 2448 Epistar Corp. 3015 FSP Technology Inc.
2030 Froch EnterpriseCo., Ltd. 2460 GemTerminal Ind. Co., Ltd. 3017 AsiaVital Components Co., Ltd.
2031 Hsin Kuang Steel Co., Ltd. 2461 K Laser Technology Inc. 3022 ICP Electronics Inc.
2032 Sinkang Industries Co., Ltd. 2476 G-Shank EnterpriseCo., Ltd. 3023 Sinbon Electronics Co., Ltd.
2034 Yeun Chyang Industrial Co., Ltd. 2477 Meiloon Industrial Co., Ltd. 3024 Action Electronics Co., Ltd.
2101 Nankang Rubber TireCorp., Ltd. 2481 Pan J it International Inc. 3030 Test Research, Inc.
2102 Federal Corp. 2485 Zinwell Corp. 3031 Bright Led Electronics Corp.
2105 Cheng Shin Rubber Ind. Co., Ltd. 2488 Hanpin Electron Co., Ltd. 3036 WT Microelectronics Co., Ltd.
Group 3
Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm Ticker symbol Firm
1227 Standard Foods Corporation 2108 Nantex Industry Co., Ltd. 2450 Senao International Co., Ltd. 2889 Waterland Financial Holdings
1419 Shinkong TextileCo., Ltd. 2206 Sanyang Industry Co., Ltd. 2472 Lelon Electronics Corp. 2911 Les Enphants Co., Ltd.
1468 Chang Ho FibreCorp. 2312 Kinpo Electronics, Inc. 2486 I-Chiun Precision Industry Co., Ltd. 8926 Taiwan Cogeneration Corp.
1513 Chung-Hsin Electric & Machinery Mfg. Co. 2338 Taiwan Mask Corp. 2493 Ampoc Far-East Co., Ltd. 9908 TheGreat Taipei Gas Corp.
1704 LeeChang Yung Chemical Ind. Corp. 2368 Gold Circuit Electronics Ltd. 2849 EnTieCommercial Bank
1731 MaywufaCo., Ltd 2431 Lien Chang Electronic Ent. Co., Ltd. 2851 Central ReinsuranceCorp.
2103 TSRC Corporation 2437 Ralec Electronic Corp. 2856 MasterLink Securities Corp.
17
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