Foreign funds post encouraging net inflow since August
By Kathryn Chiu, The China Post
August 27, 2014, 12:04 am TWN
TAIPEI, Taiwan -- The Financial Supervisory Commission (FSC, 金融監督管理委員會) chief recently said that foreign funds have come back to Taiwan in August, revealing strong confidence in the uptrend of local equity markets.
FSC Chairman Tseng Ming-chung (曾銘宗) told the United Evening News that foreign funds posted net outflow for a very short period of time after the publicly-listed companies in Taiwan handed out stock dividends. However, the situation is now the opposite of what it was, Tseng said.
Tseng maintained his upbeat view of the prospects for Taiwan's equity markets because the domestic economy is on the way to recovery.
The Central Bank earlier said that the monthly growth rates of the monetary aggregates M1B and M2, measured on a daily average basis, were 1.08 percent and 0.7 percent in July, respectively, both higher than those of last month.
The annual growth rate of M1B increased to 7.65 percent, mainly owing to increased demand deposits resulting from brisk trading in the stock market. The annual growth rate of M2 decreased to 5.63 percent, mainly owing to decreased net foreign capital inflows.
According to data from the Taiwan Stock Exchange (台灣證券交易所), the net overbought position of local securities by foreign investors was NT$28.5 billion during the week beginning Aug. 18. This represented the difference between NT$123.05 billion securities bought and NT$94.55 billion securities sold.
Wistron Most Sought-after
The three securities that reported the highest overbought positions, in terms of thousand shares, by foreign investors during the week Aug. 18-22 were: Wistron Corp. (緯創資通) 55,360, CTBC Financial Holding Co. (中信金控) 54,395 and Hua Nan Financial Holding Co. (華南金控) 30,284.
The three securities that reported the highest oversold positions, in terms of thousand shares, by foreign investors during the week Aug. 18-22 were: Inventec Corp. (英業達股份) 27,673, Ton Yi Industrial Corp.(統一實業) 21,573 and Wintek Corp. (勝華科技) 20,718.
The accumulated net overbought position by foreign investors, during the period year to Aug. 22, was NT$333.51 billion. This represented the difference between NT$3.6 trillion securities bought and NT$3.33 trillion securities sold.
The market capitalization of the shareholdings of foreign investors was NT$9,989.74 billion as of Aug. 22, or 37.69 percent of total market capitalization. This is higher than that a week ago by NT$208.48 billion.