Mon, Sep 09, 2019 - Page 16 News List

Net foreign fund outflows reach eight-year high

MARKET FEARS:After foreign institutional investors sold NT$120bn of Taiwanese equities last month, the TAIEX dropped 1.9 percent and the TPEX fell 1.92 percent

By Kao Shih-ching  /  Staff reporter

Net foreign fund outflows hit US$6.486 billion last month, the highest for August in the past eight years, as foreign institutional investors moved their cash dividends out of Taiwan, the Financial Supervisory Commission said on Thursday.

The cash dividends distributed by all of the nation’s listed companies reached NT$1.3 trillion (US$41.6 billion) as of the end of last month, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference in New Taipei City.

Most cash dividends were issued last month, Chang said, adding that Hon Hai Precision Industry Co (鴻海精密) distributed a cash dividend of NT$4 per share and Largan Precision Co (大立光) offered NT$68 per share.

The commission estimated that together, foreign institutional investors gained about NT$539 billion in cash dividends, he said.

Under the central bank’s rules, foreign institutional investors who have received cash dividends must decide soon whether they plan to put the money in the local equity market or transfer it abroad, Chang said.

“With foreign institutional investors selling a net NT$80.963 billion in local shares for the whole of last month, it seems that most of them chose to transfer their funds to overseas markets,” Chang said.

The outflow last month was partly prompted by fears about the ongoing US-China trade dispute and volatile global equity markets, the commission said.

The benchmark TAIEX fell 1.9 percent and the over-the-counter Taipei Exchange (TPEX) shed 1.92 percent last month after foreign institutional investors sold NT$120 billion of Taiwanese equities, the commission’s data showed.

Last month, the yield for 10-year US Treasury bonds fell under the yield for two-year bonds, which also weighed on investors, as concerns about a possible recession drove many of them to move their funds out of equity markets to avoid more losses, Chang said.

Still, foreign institutional investors recorded a net fund inflow of US$1.83 billion for the first eight months of the year, the commission said.

The local equity market still gained 9.16 percent in the first eight months of this year, outperforming Tokyo, which rose 3.45 percent; Singapore, which rose 1.23 percent; Hong Kong, which fell 0.47 percent; and South Korea, which fell 3.59 percent, data showed.

Taiwan has recorded foreign net fund inflows of US$199.36 billion since the government lifted a ban on foreign institutional investment in the local bourse at the end of 1990, the commission said.

Chinese institutional investors reported a much smaller net fund outflow of US$800,000 last month, it added.

Additional reporting by CNA

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