The nation’s net foreign fund outflow totaled US$3.89 billion last month, the first outflow over the past six months, as foreign institutional investors continued to sell local shares amid the COVID-19 outbreak, Financial Supervisory Commission (FSC) data showed.
Foreign institutional investors sold a net NT$129.24 billion (US$4.3 billion) of shares in the local equity market last month, higher than the NT$36.46 billion sold in January, the data showed.
Foreign investors dumped a net NT$129.8 billion of local shares of companies listed on the Taiwan Stock Exchange, while they purchased a net NT$627 million on the Taipei Exchange, lower than the NT$6.53 billion bought a month earlier, the data showed.
“That reflected weak confidence among foreign institutional investors amid the ongoing outbreak. They were concerned with local companies’ profitability, with the outbreak disrupting supply chains and delaying companies’ resumption of operations,” a commission official surnamed Wu (吳) told the Taipei Times.
The benchmark TAIEX recovered its previous loss in the middle of February, but steadily went down with the escalating outbreak, the TWSE data showed.
Equity markets in neighboring countries also witnessed a retreat.
Due to the sell-off, the value of foreign institutional investors’ equity assets accounted for 40.69 percent of total last month, down from 41.23 percent a month earlier, Wu said.
However, the commission was not concerned about last month’s net outflow, as the amount was not particularly big, Wu said.
“The movement of foreign funds is volatile in Taiwan, with net inflow and outflow. We already saw net inflow of foreign funds earlier this week,” Wu said.
Last month’s difference between the amount of fund outflow and the amount of foreign institutional investors’ selling could be because some investors did not immediately move their funds out of Taiwan, Wu said.
Those investors might plan to buy local stocks again in the near term or simply wait for the exchange rate of the New Taiwan dollar against the US dollar to strengthen, which would help investors earn more money when converting the local currency to the greenback, Wu said.
Chinese institutional investors reported a net fund outflow of US$3.7 million after selling a net NT$316 million in local shares last month, the commission’s data showed.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
ENERGY ISSUES: The TSIA urged the government to increase natural gas and helium reserves to reduce the impact of the Middle East war on semiconductor supply stability Chip testing and packaging service provider ASE Technology Holding Co (日月光投控) yesterday said it planned to invest more than NT$100 billion (US$3.15 billion) in building a new advanced chip testing facility in Kaohsiung to keep up with customer demand driven by the artificial intelligence (AI) boom. That would be included in the company’s capital expenditure budget next year, ASE said. There is also room to raise this year’s capital spending budget from a record-high US$7 billion estimated three months ago, it added. ASE would have six factories under construction this year, another record-breaking number, ASE chief operating officer Tien Wu
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
RSS