The nation’s money supply measures last month advanced significantly from a year earlier, reflecting a sharp increase in interest on the part of domestic and foreign investors in the local stock market, the central bank said yesterday.
The M1B money supply jumped 12.85 percent from a year earlier, the fastest gain since July 2010, while M2 rose 7.05 percent, the bank said.
M1B refers to cash and equivalents, while M2 includes savings deposits, time savings deposits, foreign currency deposits and M1B.
Photo: Reuters
The increase in M1B came after local retail investors shifted money away from time deposits to demand deposits, the central bank said.
Demand deposits soared by 13.79 percent year-on-year, the fastest increase since May 2010, to a record NT$18.9 trillion (US$655.5 billion), it said.
It is common for local investors to park their money in demand deposits before making an investment in local shares.
Securities accounts saw inflows of NT$34.1 billion to NT$2.5 trillion last month, even though the US presidential elections drove some global players to the sidelines, the central bank said.
Margin loans rose to NT$209.1 billion, the highest since October 2018, reflecting an increase in leveraging, it said.
Retail investors accounted for 61.5 percent of the market, while foreign institutional participants made up 28.8 percent, the central bank said.
Last month also saw an influx of foreign capital valued at US$2.06 billion to buy local shares, especially tech names, as Taiwanese companies pay relatively high dividends compared with their global peers, it said.
Local electronics suppliers reported strong earnings this year due to a boom in demand for devices and solutions used in remote working and schooling arrangements amid the COVID-19 pandemic, the central bank added.
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