Foreign investors see US$3.32 billion net fund inflow in February

Taipei--Foreign institutional investors in Taiwan registered a net fund inflow of US$3.32 billion in February, an increase from the previous month, according to government statistics.

Data released Friday by the Financial Supervisory Commission (FSC) showed that the net inflow of US$3.32 billion in February not only beat the January figure of US$2.65 billion but was the highest monthly amount since last June, when it reached US$4.05 billion.

Riding the wave of high liquidity in the first two months of 2017, the weighted index on the Taiwan Stock Exchange rose 496.97 points or 5.37 percent during that period.

At the end of February, the weighted index closed at 9,750.47 points after repeatedly breaching the stiff technical resistance of 9,800 points earlier in the month on a liquidity driven uptrend, analysts said.

They said that many Taiwanese investors operating in China have been moving their funds back home in recent months as Chinese authorities have been stepping up their efforts to avoid tax evasion by foreign investors.

Since the Taiwan government lifted a ban on foreign institutional investments on the local bourse at the end of 1990, the aggregate net fund inflow into the country has been US$205.33 billion, according to according to FSC data valid as of the end of February.

With foreign funds flowing into Taiwan in the first two months of 2017, foreign institutional investors bought a net NT$95.3 billion (US$3.07 billion) worth of shares on the local main board during that period, the FSC statistics indicated.

On Friday, the third trading session of March, the weighted index ended at 9,648.21 points, down about 1.05 percent from the end of February, amid rising concerns over a possible interest rate hike in the United States later this month.

The worry is that a rate hike will push up the U.S. currency, prompting foreign investors move their funds out of the region and into U.S dollar denominated assets.

However, FSC Vice Chairman Cheng Cheng-mount (???) has said that with the Taiwan economy well on its way to recovery, it is unlikely to be affected much by a rate hike in the U.S.

Source: Focus Taiwan News Channel