Foreign investors have shown their optimism on the nation's economic outlook by pouring large amounts of long-term investment into the local bourse, the Financial Supervisory Commission said yesterday.
The cumulative overseas capital inflow amounted to US$108.9 billion as of the end of last year, the commission said in a report on its Web site. For last year alone, the net amount of foreign funds that flowed into the nation reached US$28.8 billion, the report said.
Over 85 percent of these foreign funds were invested in the nation's equities markets last year, boosting foreign shareholdings in the local stock markets to as much as 31.8 percent at the end of last year, the commission said. More than 80 percent of Taiwan's foreign investors were fund managers who usually pursue mid-to-long-term investments, the financial watchdog added.
According to statistics provided by the Taiwan Stock Exchange, net purchases of Taiwanese stocks by foreign investors reached a record NT$719.41 billion (US$21.9 billion) last year, boosting the benchmark TAIEX to close 6.66 percent higher for the year at 6,548.34 points, its third straight annual rise.
Based on these statistics, foreign investors are bullish about Taiwan's economic prospects and are willing to make long-term investments in the country, the commission said in its report.
Overseas investors have bought a net NT$52.2 billion stocks so far this year since the local stock opened on Jan. 2, according to stock exchange statistics.
Driven by strong capital momentum, the local bourse has continued to strengthen, with the TAIEX closing at 6,682.35 points last Friday, representing a 3.4 percent increase since the beginning of this year.
"I am confident about the stock market's performance this year," commission chairman Kong Jaw-sheng (
Kong added that he expected the number of companies making initial public offerings (IPO) to rise in light of the robust market response to the implementation of the stock exchange's new underwriting mechanism.
The new system increased the responsibility of underwriters and certified public accountants to protect investors' rights and interests, while simultaneously abolishing the 7-percent daily trading limit on the share prices of listed companies for the first five days of trading.
So far, a total of eight companies have issued IPOs under the new regulations.
The share price of one of these companies, Wellypower Optronics Corp (威力盟), the world's No.4 maker of lamps used in computer and television flat panels, closed up 139 percent at NT$151 in the first day of trading on the over-the-counter market, setting a record single-day gain on the local bourse.