Taiwan recorded net foreign fund inflow of US$4.135 billion last month, ending four consecutive months of outflows, Financial Supervisory Commission data showed yesterday.
The net inflow came as foreign institutional investors, who own about 40 percent of local shares, bought a net NT$70 billion (US$2.37 billion) of local shares last month, the data showed.
The TAIEX rose 542 points, or 4.8 percent last month, while the over-the-counter TPEX gained 7.1 percent, according to data compiled by the Taiwan Stock Exchange (TWSE) and the Taipei Exchange.
Foreign investors’ purchases of local shares this month were the highest this year, after purchases of NT$13.3 billion in April, when the local market began recovering after the turmoil of March due to the COVID-19 pandemic, the commission said.
“It seems that foreign investors have returned to the local market,” a commission official said yesterday. “That is understandable, as foreign investors were looking for investment targets with solid returns amid rates cuts worldwide.”
However, it is uncertain whether the net inflow would continue this month, as many foreign investors tend to move cash dividends out of Taiwan in July and August, the official said.
The difference between fund inflows and shares purchased was US$1.77 billion, as some investors likely did not need to transfer funds to Taiwan from overseas because they had New Taiwan dollars onshore after selling local shares in May, the official said.
For the first half of this year, foreign institutional investors registered a net fund outflow of US$12.67 billion, compared with a net fund inflow of US$10.02 billion in the same period last year, the commission’s data showed.
The TAIEX yesterday closed up 207.54 points, or 1.74 percent, at 12,116.70, on turnover of NT$248.394 billion.
Foreign institutional investors bought a net NT$20.15 billion in local shares yesterday, TWSE data showed.
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