More funds for investment were remitted out of Taiwan than were remitted into it in the third quarter for the 33rd consecutive quarter, the longest run in the nation’s history, the central bank said.
The net fund outflow in Taiwan’s financial account, which measures the flow of direct investment and portfolio investments, was US$7.83 billion, bringing the aggregate net outflow for the 33 quarters to US$386.42 billion, data compiled by the central bank showed on Tuesday.
However, the net fund outflow for the July-to-September period was the lowest since the second quarter of 2013, when the figure stood at US$6.66 billion, the data showed.
Net securities assets held by overseas Taiwanese residents rose by US$11.57 billion last quarter from a year earlier, largely because of large investments by life insurance companies to purchase foreign bonds, the central bank said.
Meanwhile, net direct investments made by Taiwanese residents overseas were also up by US$4.46 billion in the third quarter from a year earlier, central bank data showed.
The continued outflow in the financial account fueled mounting concerns that investors will keep moving funds out of the country and into US dollar-denominated assets.
However, the bank dismissed the concerns, saying that Taiwan is one of the few countries in the world to have a long-term current-account surplus, and countries with such surpluses tend to register net financial-account outflows.
Other countries following a similar pattern include Japan, Singapore, South Korea, Germany and Russia, it said.
The current account mainly measures a country’s merchandise and service exports and imports.
In the third quarter, the current-account surplus totaled US$14.04 billion, down US$7.67 billion, or 35.3 percent, from a year earlier, the central bank said.
The decline largely reflected an increase in machinery imports, in particular in the semiconductor industry, while a spike in international crude oil prices also boosted the value of imports, the bank said.
The current-account surplus for the third quarter fell to a low since the third quarter of 2014, when the figure was US$13.87 billion, it said.
Taiwan’s surplus in merchandise trade fell US$7.44 billion from a year earlier to US$16.3 billion in the third quarter, with exports up US$2.92 billion and imports up US$10.37 billion year-on-year in the quarter, the data showed.
The service deficit in the third quarter stood at US$2.42 billion, down US$4.7 billion, the central bank said, adding that the deficit was largely because residents were keen to travel overseas.
In the first nine months of the year, the current-account surplus totaled US$50.06 billion, the central bank said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a