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.
Semiconductor stocks on Friday took a beating after a grim profit warning from Idaho-based Micron Technology Inc sparked fresh worries about the US’ earnings power as the country is potentially heading for a recession. Despite a broader stock market rally, the Philadelphia Stock Exchange Semiconductor Index dropped 3.8 percent after Micron, the largest maker of memory semiconductors in the US, flagged that demand was cooling for chips used in computers and smartphones. The index — which is home to US chip giants Advanced Micro Devices Inc and Nvidia Corp, as well as Micron — is down 38 percent this year. Historically, semiconductor
WHOLLY OWNED SUBSIDIARY: Costco Wholesale said it expected the purchase of the remaining 45 percent stake to add 1 to 1.5 percent to its earnings per share US-based Costco Wholesale Corp on Thursday said that it had purchased the remaining 45 percent stake in Costco President Taiwan Inc (台灣好市多) for US$1.05 billion, making the local company a fully-owned unit. “We estimate that the purchase would add about 1 to 1.5 percent to [our] earnings per share,” Costco said in a statement. Costco President Taiwan was established as a joint venture with Kaohsiung-based President Group (大統集團), which held a 45 percent stake. Since the first Costco store opened in Kaohsiung in 1997, 14 outlets have been set up in Taiwan, company data showed. PROFITABLE Three Costco stores in Taiwan — in Taipei’s Neihu
SOARING PROFITS: Semiconductors and shipping have knocked automaking and construction out of the 10 highest paying industries, stock exchange data showed Mobile phone chip designer MediaTek Inc (聯發科) posted an average of NT$5.15 million (US$173,249) in annual compensation for non-managerial employees last year, marking the highest among all firms listed on the Taiwan Stock Exchange (TWSE), exchange data showed. That is a 66 percent increase from the company’s average compensation of NT$3.08 million in 2020, as its earnings per share (EPS) expanded from NT$26.01 in 2020 to NT$70.56 last year. That is also three times higher than the average compensation of NT$1.7 million in the nation’s semiconductor industry, the data showed. The increases helped MediaTek advance its ranking from third in 2020, replacing
EXPANSION: The airline will offer two flights per week to Milan from Oct. 25, and four flights per week to Munich from Nov. 3 using its Boeing 777-300ER aircraft EVA Airways Corp (長榮航空) yesterday announced that it would begin nonstop flights from Taoyuan to Milan and Munich later this year, marking its first expansion in the European market in 25 years. Starting on Oct. 25, the airline will operate two flights per week between Taoyuan and Milan, implementing a plan that was scheduled for February 2020, but was suspended due to the COVID-19 pandemic and the consequent lockdowns across the world. The airline will also launch four weekly flights to Munich, Germany, on Nov. 3, it said. The schedules for the two flights will cater to in-transit passengers, as they will arrive
RSS