The nation’s securities account balance, a gauge of retail investors’ confidence in local equities, rose to its highest level last month, as the TAIEX rallied 1,286.5 points — or 5.78 percent — in the month, data released on Friday by the central bank showed.
The securities account balance increased for a fourth consecutive month to NT$3.67 trillion (US$119.99 billion), up NT$263.5 billion from NT$3.41 trillion the previous month, the data showed.
The increase in the securities account balance came as the TAIEX continued to test the 23,000 level last month on the back of steady support from retail investors and foreign institutional investors, which bought a net NT$227.96 billion of local shares.
Photo: RITCHIE B. TONGO, EPA-EFE
In contrast, domestic investment trust firms sold a net NT$13.77 billion of local shares, Taiwan Stock Exchange (TWSE) data showed.
Last month, retail investors accounted for 51.3 percent of the main board’s trading volume, the highest since March and compared with 47 percent one month earlier, the data showed.
In comparison, local institutional investors made up 14.4 percent of total trading, down from 16.2 percent the previous month, while foreign institutional investors’ proportion of market transactions fell to 34.3 percent, from 36.8 percent.
The central bank’s latest data indicated that stock market sentiment remained bullish at the start of the third quarter of the year as the TAIEX averaged 22,963 points last month, up from 22,014 points in June and 21,271 points in May.
The balance of margin loans also increased to NT$315.2 billion last month, up from NT$305.4 billion in June and NT$297.7 billion in May, it said.
Meanwhile, the daily average turnover on the main board expanded to NT$319.9 billion, compared with NT$343 billion in June and NT$310.8 billion in May, it added.
The TAIEX last week fell 570.01 points, or 2.34 percent, to settle at 23,764.47 on Friday.
It has risen 3.17 percent so far this year, with a daily average turnover of NT$358.41 billion on the main board, TWSE data showed.
With the continued increase in the securities account balance, M1B money supply — a measure of money in circulation, including currency and passbook savings deposits — posted an annual growth rate of 2.86 percent last month, up from a 2.44 percent increase in June, the central bank said.
The annual growth rate in the broader measure M2 — which includes time deposits, time-saving deposits, foreign currency deposits, mutual funds and M1B — fell to 3.42 percent from 3.45 percent, as deferred income tax payments shifted the timing of tax receipts compared with the previous year, it said.
In the first seven months of the year, M1B increased 2.63 percent and M2 rose 4.16 percent from a year earlier, both remaining within the central bank’s target range of 2.5 to 6.5 percent annual growth, it said.
That indicates that market liquidity remains ample, which is beneficial to consumption, the stock market and the economy as a whole.
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