Nation’s securities account balance reaches record high of NT$3.51trillion

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 1,327.68 points, or 7 percent, data released by the central bank showed yesterday.

The securities account balance increased for a second consecutive month to NT$3.51 trillion (US$107.9 billion), up NT$56.4 billion from NT$3.45 trillion the previous month, the data showed.

The continued increase in the securities account balance came as the TAIEX mostly held above 20,000 points last month on the back of steady support from retail investors and domestic investment trusts, although foreign institutional investors only bought a net NT$22.7 billion of local shares, compared with a net buy of NT$116.2 billion the previous month, Taiwan Stock Exchange (TWSE) data showed.

Last month, retail investors accounted for 55.42 percent of the main board’s trading volume, compared with 55.39 percent one month earlier.

In comparison, foreign institutional players’ proportion of market transactions fell to 32.12 percent, from 33.03 percent, TWSE data showed.

The central bank’s latest data reflected that stock market sentiment remained bullish in the first quarter of the year as the TAIEX averaged 19,843 points last month, up from 18,612 points in February and 17,668 points in January.

The balance of margin loans increased to NT$379 billion last month, up from NT$351.3 billion the previous month and NT$334.7 billion in January, hitting a 13-year high, it said.

Meanwhile, the daily average turnover on the main board also expanded to NT$441.2 billion, compared with NT$363.9 billion in February and NT$280.8 billion in January, it added.

The TAIEX yesterday closed at 20,131.74 points, up 2.72 percent from the previous session, having risen 9.31 percent so far this year, with a turnover of NT$427.562 billion, TWSE data showed.

The securities account balance this month might decrease as the TAIEX underwent a consolidation in line with the recent volatility in US equities, the central bank said.

The bank attributed the cautious market sentiment to factors such as investors’ growing reservations about the US Federal Reserve’s first rate cut, Taiwan Semiconductor Manufacturing Co’s (台積電) downbeat forecast for the global semiconductor industry this year, and more industry watchers turning wary about the outlook for major players in the artificial intelligence and electric vehicle fields.

However, Taiwan still has abundant funds and the liquidity momentum in capital markets remains strong, which is conducive to the stock market and the economy as a whole, the bank said.

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 5.38 percent last month, up from a 4.47 percent increase in February, 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 — rose to 6.15 percent from 5.59 percent, the bank said, attributing the increase to net foreign capital inflows.

In the first three months of the year, M1B rose 4.47 percent and M2 advanced 5.73 percent from a year earlier, which is still within the central bank’s target of 2.5 percent to 6.5 percent in annual growth, it said.