Major equity market players return to trading floor: FSC

Taipei, Major local equity market players have been returning to the trading floor at a time when the average turnover in the local bourse has hit a recent high, according to the Financial Supervisory Commission (FSC), Taiwan's top financial regulator.

In a hearing held by the financial committee of the Legislative Yuan Wednesday, Lee Ruey-tsang (???) cited FSC data as saying that that the number of major local equity market players who traded no less than NT$500 million (US$16.13 million) on the local main board in a single quarter stood at 436 in February, up from 389 recorded in November 2016.

Lee said that the number of investors who traded no less than NT$100 million on the main board in a quarter rose to 4,217 from 4,002 on the main board during the same period.

In the local over-the-counter market, the number of investors whose quarterly trading hit NT$100 million or higher also rose to 6,446 in February from 5,876 in November, Lee said.

The FSC data shows that although foreign investors moved funds out of the region in recent sessions amid expectations of a rate hike by the U.S. Federal Reserve in a policymaking meeting scheduled for next week, the average daily turnover in the local equity market still hit a new high of about NT$134.5 billion since July 2014.

The soaring daily trading volume has not been seen in the last two years, when many local investors stepped away from the trading market, while foreign institutional investors dominated the local equity market.

Lee said that the increase in daily turnover serves as evidence that more and more major local market players have become willing to jump into the market, offsetting the impact resulting from fund outflows by foreign investors.

He said that the moves by local major market players to return to the trading floor appeared more apparent in February after the Lunar New Year holiday ended on Feb. 1. In February alone, the weighted index on the Taiwan Stock Exchange rose 265.95 points, or 3.27 percent.

Based on the data, local investors brought more than NT$300 billion in investments to the local equity market in the past three months, the FSC said. Lee said that the increase in liquidity bodes well for the movement of local equities.

FSC officials said that if the trend in which major local market players' return continues, the number of investors is expected to hit 550 in the first quarter of this year to top the 532 recorded in the first quarter of last year.

Commenting on a possible rate hike by the Fed, the FSC officials said that a move by the Fed to tighten its monetary policy shows a recovery of the U.S. economy.

Although a rate increase in the U.S. market could send ripples across the global financial markets in the short term, a solid U.S. economy -- the largest in the world -- will benefit global fundamentals, including Taiwan's, in the longer term.

Source: Focus Taiwan News Channel