Foreign institutional investors resume net fund inflows in January

Taipei–Foreign institutional investors resumed net fund inflows into Taiwan in December after three months of net outflows, at a time when global financial markets showed signs of stabilizing and diminishing fear over an interest rate hike in the United States, according to the Financial Supervisory Commission (FSC).

Citing data, the FSC, the top financial regular in Taiwan, said there was US$2.65 billion in net fund inflows into the country from foreign institutional investors in December after about US$7.15 billion in net fund outflows over the previous three months.

Starting from October, foreign institutional investors moved funds out of Taiwan for three consecutive months, with global financial markets concerned over a possible rate hike cycle by the U.S. Federal Reserve.

As a result of those net fund outflows, aggregate net fund inflows into Taiwan since 1990 fell below US$200 billion to US$199.37 billion as of the end of December, a new six month low, FSC data showed.

After the Fed raised its key interest rates at a policymaking meeting in mid-December, global financial markets stabilized. At the latest policymaking meeting in January, the U.S. central bank decided to leave interest rates unchanged.

Net foreign fund inflows in January were the highest since July, when foreign fund inflows stood at US$2.704 billion, the FSC statistics indicated.

Since the government lifted a ban on foreign institutional investments on the local bourse at the end of 1990, foreign institutional investors have accounted for an accumulated US$202.02 billion in net fund inflows into Taiwan, returning to the US$200 billion mark, on the back of net inflows in January.

In January, foreign institutional investors bought a net NT$46 billion (US$1.49 billion) worth of shares on the local main board and recorded net sales of NT$135 million worth of shares on the over-the-counter market, the FSC said.

In the Year of the Monkey, which ran from Feb. 8, 2016 to Jan. 27, 2017, the local main board was boosted by strong foreign institutional buying with the weighted index rising 1,384.95, or 17.18 percent.

The Taiwan dollar also rode the wave of foreign fund inflows, rising 6.89 percent against the U.S. dollar during the Year of the Monkey, the largest gain in six lunar calendar cycles.

Source: Focus Taiwan News Channel