80% of the major equity market players back on trading floor: FSC head
July 30, 2014, 12:04 am TWN
TAIPEI -- Almost 80 percent of major players in the local market have returned to the trading floor, a development that could further raise market turnover and make trading more active, Chairman of the Financial Supervisory Commission (FSC, 金管會) Tseng Ming-chung (曾銘宗) said Tuesday.
By the market definitions, a “major player” is an investor whose trade stocks are valued at no less than NT$500 million (US$16.67 million) a quarter.
Tseng said on the sidelines of a cross-strait financial market seminar that to his knowledge, more than 850 major market players jumped into the trading floor as of the end of June, which represented almost 80 percent of the historic peak of 1,100 investors.
Since the government started to levy capital gains from stock investments in early 2013, turnover in the local market had shrunk significantly as many major players were scared away.
But the FSC, the top financial regulator in Taiwan, launched a series of measures including the relaxation of day trading rules starting from the second half of last year, causing trading volume in the local market to expand gradually and pulling large investors back.
As the economy is on the way to recovery, foreign institutional investors have also kept moving funds into the country and causing further gains in the local market.
Since the beginning of this year, the weighted index on the Taiwan Stock Exchange (TWSE, 台灣證券交易所) has gained about 9.06 percent as of Tuesday, when it closed at 9,391.88 points.
Tseng said so far this month, foreign institutional investors have remained net buyers in the local equity market, making it very likely that July will become the 11th consecutive such month.
According to the TWSE, foreign institutional investors have bought a net NT$33.03 billion worth of local shares in the month to Tuesday.
Tseng said foreign institutional buying has its merits, as the local economy is expected to grow more than 3 percent in 2014 and listed companies on the main board and the over-the-counter market have booked more sales.
According to the FSC, sales posted by locally listed companies totaled NT$14.1 trillion, up 5.5 percent from a year earlier.
Tseng said an increasing number of local businesses are paying attention to corporate governance and improving the transparency of their financial reports, a signal that has prompted foreign investors to buy their shares.