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Updated Sunday, February 5, 2012 0:02 am TWN, CNA

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Fund inflows during January hit nine-month high: FSC

TAIPEI--Net fund inflows in January hit a nine-month high to reach US$3.02 billion (NT$89.1 billion) as foreign institutional investors resumed buying in the local bourse, according to the Financial Supervisory Commission (FSC).

According to the statistics released by the FSC Friday, foreign institutional investors were net buyers of NT$51.32 billion (US$1.74 billion) worth of shares on the Taiwan Stock Exchange in the past month.

During the same period, foreign institutional investors bought a net of NT$3.93 billion on the over-the-counter (OTC) market, the statistics showed.

The benchmark weighted index on the local exchange at the end of January closed up 6.29 percent from a month earlier at 7,517.08 points, with the OTC index even gaining 10.37 percent at 103.63 points at the end of January.

The FSC said the increase in fund inflows showed foreign investors remained upbeat about the prospects of the local stock market, and high liquidity as a result of foreign fund injections was expected to benefit the future movements of the local bourse.

On the back of further foreign fund inflows, the main board and the OTC market will continue their momentum in February, market analysts said.

In the first three trading sessions, the benchmark weighted index rose 2.1 percent, while the OTC index added 6.16 percent.

Analysts said the large net buy posted by foreign institutional investors in January appeared significant, although the month had just 15 trading sessions due to the prolonged Lunar New Year holiday.

They said the strong foreign institutional buying interest largely reflected the removal of uncertainty over the local political climate after the Jan. 14 presidential election, in which the ruling Kuomintang scored a victory, while recent improving economic data in the U.S. and Europe also prompted foreign investors to boost portfolios.

Compared with net fund inflows of about US$6 billion in South Korea so far this year, it was possible for foreign investors to move more funds into Taiwan to bet on further rebounds in the local bourse, they added.

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