Number of big stock traders down in Q3 in volatile market

Taipei, The number of major retail traders in Taiwan's stock market fell in the third quarter from a quarter earlier, as unfavorable external factors, including escalating trade friction between the United States and China, made investors more cautious.

According to the Taiwan Stock Exchange (TWSE), which operates the main market, the number of investors who traded more than NT$500 million (US$16.14 million) in shares in the July-September period fell 4.56 percent from a quarter earlier to 1,507.

The number of investors who traded NT$100 million to NT$500 million in stocks in the quarter also fell 5.08 percent from a quarter earlier to 11,915, TWSE data showed.

Retail investors on the over-the-counter (OTC) market, where smaller-cap stocks are listed and turnover is lower than on the main exchange, were even more cautious.

The number of investors who traded more than NT$100 million in stocks dropped about 27 percent in the third quarter from a quarter earlier to 3,276.

Investor concerns were driven by escalating punitive tariffs imposed on Chinese imports by the United States.

A 10 percent tariff was imposed on US$200 billion in Chinese goods in September after a 25 percent tariff was levied on US$60 billion in Chinese merchandise earlier this year.

The 10 percent tariff could rise to 25 percent by the end of this year, and U.S. President Donald Trump has threatened the imposition of tariffs on an additional US$267 billion in Chinese goods.

Analysts said even more major market players could exit the trading floor in the fourth quarter, with share prices falling as the trade dispute between Washington and Beijing shows no sign of being resolved anytime soon.

Investors are also worried about a fund flight as the U.S. dollar strengthens because of expectations the U.S. Federal Reserve will continue to raise interest rates.

With a growing number of foreign institutional investors moving their funds out of the region, falling liquidity is expected to drive more major retail investors away from the market in the current quarter.

Wellington Koo (???), chairman of the Financial Supervisory Commission, said Tuesday the fall in the number of major traders in the third quarter was understandable considering the market's volatility.

But he said the market still has sound fundamentals that should strengthen the market's performance in the future.

Source: Focus Taiwan News Channel