Taiwan’s money supply, measured by movements in the M1B and M2 gauges, logged annual gains of 17.36 percent and 9.02 percent respectively last month, as local individual investors increased investments in the local bourse, the central bank said on Friday.
The pace of the increases represented a minor slowdown from May, when the narrower M1B money supply gauge, measuring cash and cash equivalents, rose 17.74 percent and the broader M2 gauge, which includes M1B, time deposits, time savings deposits, foreign currency deposits and mutual funds, rose 9.21 percent.
The M1B gauge is often used to access stock investment interest. Investors are said to prefer to hold on to cash to guard against market volatility when M2 growth outpaces M1B growth.
Photo: CNA
Securities accounts, a main M1B growth driver this year, climbed to a record NT$3.05 trillion (US$108.82 billion), while margin lending rose to NT$347.5 billion, the highest since June 2011, the bank said.
Retail investors accounted for 73.7 percent of daily turnover on the Taiwan Stock Exchange (TWSE), the highest since January 2010, the central bank said.
An easing of odd-lot regulations and day-trading rules seemed to have attracted younger and less affluent investors to trade on the local bourse, the central bank added.
However, overseas and foreign players only accounted for 19.2 percent, the lowest since April 2012, the central bank said.
Foreign portfolio managers have this year trimmed holdings in local shares, wiring US$1.91 billion abroad last month in the hope of pursuing better returns in other markets, the bank said.
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