Fund outflows from Taiwan reached a record high in the first quarter of this year, marking the 47th consecutive quarter of cash transferring out of the country, as the central bank attributed the pattern to overseas bond investments by Taiwanese financial institutions.
It was the third straight quarter that Taiwan reported record high fund outflows.
Data compiled by the central bank showed net outflows in Taiwan’s financial account — which measures the flow of direct investment and portfolio investment — totaled US$32.22 billion in the January-to-March quarter, up from US$18.56 billion a year earlier.
Photo: CNA
The first quarter’s fund outflow also beat the US$31.78 billion recorded in the fourth quarter of last year, the central bank’s statistics showed.
A spike in US Treasury yields prompted many Taiwanese financial institutions to park funds overseas after the US Federal Reserve introduced a rate-hike cycle that began in March, bank officials said.
The increase in net fund outflows came after portfolio investments abroad posted a net asset increase of US$49.92 billion, as insurance companies raised their investment in debt securities overseas, they said.
Out of the US$49.92 billion, residents’ portfolio investment abroad posted a net increase of US$35.21 billion on the back of a rise in overseas debt securities investment by insurance companies as well as other financial institutions, bank officials said.
Non-residents’ portfolio investment recorded a net fall of US$14.72 billion, as foreign investors reduced equity holdings in the local stock market in the first quarter, when the TAIEX shed 525.37 points, or 2.88 percent, after foreign institutional investors sold a net NT$459 billion (US$15.48 billion).
Over the past 47 quarters, accumulated net fund outflows hit US$660.51 billion, equivalent to more than seven years of Taipei’s tax revenue.
Addressing concerns that investors could continue to move funds out of the country and into US dollar-denominated assets, the central bank said that net financial account outflows are common among countries like Taiwan, which have a long-term current account surplus.
Other countries, like Japan, Singapore, South Korea and Germany, which have all had such a surplus, have also tended to record net financial account outflows, the bank said.
A current account mainly measures exports and imports of merchandise and services.
Taiwan in the first quarter recorded a current account surplus of US$30.68 billion, up US$4.85 billion from a year earlier, reporting a US$20.47 billion surplus in commodity trade, up US$1.7 billion from a year earlier, due to solid global demand for technology products amid a digital transformation.
Additionally, service trade reported a surplus of US$4.34 billion, a new quarterly high, due to increases in cargo shipping revenue amid tight supply, the central bank said.
Meanwhile, the central bank’s reserve assets rose only US$260 million, as the bank entered the foreign exchange market by selling US dollars to cap the depreciation of the New Taiwan dollar against a strong greenback.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
POWER BUILDUP: Powered by Nvidia’s B200 Blackwell chips, the data center would support MediaTek’s computing power demand and business growth, the company said Smartphone chip designer MediaTek Inc (聯發科) yesterday launched a new artificial intelligence (AI) data center with a maximum capacity of 45 megawatts to meet its rising demand for computing power required to develop new advanced chips for AI applications. The company has completed the first-phase computing power buildup at the data center in Miaoli County’s Tongluo Township (銅鑼), providing 15 megawatts of capacity to support its research and development (R&D) capabilities, despite an industrywide shortage of key components, MediaTek said. Supply constraints have plagued a wide range of key components, including memory chips, solid-state drives, power supply units and central
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
RSS