Foreign institutional investors in Taiwan registered a net fund outflow of US$5.81 billion last month, when tech stocks on the local market were encountering headwinds, the Financial Supervisory Commission reported on Tuesday last week.
Last month’s figure was the fifth-largest monthly outflow since 2011 and followed the US$4.7 billion in net outflow in July, the commission said.
Securities and Futures Bureau Chief Secretary Shang Kuang-chi (尚光琪) said the massive fund outflow came after the TAIEX plunged about 511 points, or 2.98 percent, as investors locked in profits made on stocks related to artificial intelligence.
PHOTO: REUTERS
Other contributing factors were the hawkish tone struck by the US Federal Reserve at the annual Jackson Hole Economic Symposium, and the financial woes suffered by several major Chinese property developers, which spooked market sentiment, Shang said.
Last month, foreign institutional investors sold a net NT$123.74 billion (US$3.87 billion) worth of shares on the local stock market, a monthly high so far this year, which led to heavy losses on the TAIEX, the commission said.
In the first eight months of this year, foreign institutional investors registered an aggregate net fund inflow of US$13.83 billion on the back of a strong rebound in tech stocks in line with the global markets, commission data showed.
During the same period, foreign institutional investors bought a net NT$90.995 billion worth of shares on the local market, it said.
The aggregate fund inflow registered by foreign institutional investors showed that they remained confident in the local market, Shang said.
As of the end of last month, foreign institutional investors were holding a 38.2 percent share of the combined market capitalization on the main board and the over-the-counter (OTC) market, the commission said.
Listed companies on the local main board and the OTC market generated NT$2.132 trillion in combined revenue in the first seven months of the year, the third highest in Taiwan’s history, despite weakening global demand, high inflation and aggressive rate hikes by major central banks worldwide, according to Shang.
As of the end of July, the average cash dividend yield in Taiwan was 3.53 percent, one of the highest in the world, while the average price-to-earning ratio , which gauges a company’s valuation by measuring its current share price against its earnings per share, was only 16.8, indicating that the Taiwan stock market remained attractive, Shang said.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
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