Foreign institutional investors last month recorded a net fund inflow of US$4.28 billion, the highest in 21 months, as the local equity market made a strong showing, the Financial Supervisory Commission (FSC) said.
The massive foreign fund inflow served as a driver for the solid gains enjoyed by the local stock market in a month that saw an easing of trade friction between the US and China, spurring hopes that the two would sign a phase one deal to resolve their disputes, analysts said.
The TAIEX last month rose 509.03 points, or 4.89 percent, as foreign institutional investors picked up local tech heavyweights, including chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). TSMC shares soared 9.74 percent.
The net foreign fund inflow also boosted the over-the-counter (OTC) market, with the TPEX rising more than 3 percent.
Net fund inflow was about US$1.28 billion higher than September’s figure, the commission said.
In the first 10 months of this year, foreign institutional investors registered a net buy of NT$133.51 billion (US$4.4 billion) worth of shares on the main board and a net buy of NT$20.72 billion worth of shares on the OTC market, the commission’s data showed.
Thanks to that inflow, the holdings of Taiwanese stocks, bonds and New Taiwan dollar-denominated deposits by foreign investors in foreign exchange reserves rose by US$35.7 billion from a month earlier to US$416.8 billion as of the end of last month, the central bank said on Tuesday.
As a result, foreign-held assets were equal to about 88 percent of Taiwan’s foreign exchange reserves of US$472.48 billion, up 7 percentage points from a month earlier, the bank said.
Last month’s ratio hit a new high in 19 months, it added.
Due to the large foreign fund inflow, the NT dollar rose 1.9 percent against the US dollar.
So far this month, the local currency has declined 0.16 percent. It closed at NT$30.412 on Friday in Taipei trading.
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