The nation’s international investments recorded a net asset position of US$620.7 billion as of the end of last year, placing Taiwan in sixth place after Japan, China, Germany, Hong Kong and Switzerland, the central bank said yesterday.
The international investment position refers to the balance between a nation’s financial assets and liabilities to the rest of the world.
Last year’s figures were up US$43.2 billion, or 7.5 percent, from US$577.5 billion a year earlier, the central bank said in its latest international investment position report.
Based on the central bank’s balance sheet of international investment, Taiwan’s total external assets amounted to US$995.7 billion at the end of last year, up US$131 billion, or 15.1 percent, from US$864.7 billion in the previous year.
INVESTMENT ABROAD
“This was mainly due to an increase in portfolio investment abroad by the private sector and reserve assets,” the central bank said in the report.
Standard & Poor’s Ratings Services, which last week revised upward the outlook on Taiwan’s sovereign credit rating from “negative” to “stable,” said at the time that the country’s strong net external asset position bolsters its creditworthiness and mitigates weaknesses elsewhere in its credit quality.
Based on the central bank’s latest tallies, portfolio investment by the country’s residents grew 34.7 percent year-on-year to US$254.4 billion last year, foreign exchange reserves went up 19.1 percent year-on-year to US$353 billion and the amount of financial derivatives declined 25.7 percent to US$10.1 billion.
PORTFOLIO HOLDINGS
“As a result of the increased foreign portfolio holdings through the purchase of mutual funds by residents and the recovery of global equity markets, the balance of residents’ equity security investments abroad went up by US$49.5 billion, or 70.4 percent, at the end of 2009,” the central bank said.
Total external liabilities increased US$87.9 billion, or 30.6 percent, to US$375.1 billion last year from US$287.2 billion in 2008, which the central bank attributed to “large inflows of foreign equity investment and rising local share prices,” according to the report.
Foreign equity investment totaled US$204.7 billion at the end of last year, up US$94.6 billion, or 85.9 percent, from US$110.1 billion in the previous year, as the stock exchange’s data showed the benchmark TAIEX rallied 78.34 percent for the whole of last year.
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