Foreign investors dump shares, remit gains out of Taiwan
Foreign investors have sold more shares than they bought before promptly remitting the gains out of the country in the past week, the central bank said yesterday.
According to Harry Yen ( ), director-general of Central Bank's foreign exchange department, busy trading last between June 1 and 5, and out of the 6,000 – 7,000 foreign accounts in Taiwan, frequent transactions occurred through more than 20 larger ones.
The amount of net sell was pegged at NT$9.93 billion on Friday, and NT$13.07 billion the previous day. Foreign investors’ net sell of Taiwan shares totaled over NT$37.39 billion in the past six days.
Most capital gains were quickly remitted overseas, said the central bank. Some were wired on the same day of sell, while others were wired a couple of days later.
Nevertheless, there was a net inflow of US$1.69 billion in May, noted the Financial Supervisory Commission ( ).
Short-term money flow has great impact on the fluctuation of New Taiwan dollar’s exchange rates, Yen said, adding that mass purchase or sell made by foreign investors will be closely monitored by the central bank.
It is in the central bank’s interest that the exchange rate reflects the fundamentals, Yen said.
Foreign Exchange Reserve Grew
US$784 million in May
The central bank also announced yesterday that Taiwan’s foreign exchange reserve totaled US$418.95 billion as the end of May, which was a US$784 million increase from April. The central bank attributed the increase to investment gains.
Foreigners’ hold of local shares, bonds and New Taiwan dollar savings worth US$322.5 billion in total. The value was 77 percent of the foreign exchange reserve.
The central bank pointed out that the euro’s value rose 4.3 percent in April and fell 2 percent in May, which wielded impact on Taiwan’s foreign exchange reserve.
South Korea’s foreign exchange reserve grew US$1.6 billion to reach US$362.1 billion in May, while Hong Kong reserve jumped US$10.1 billion to arrive at US$331 billion in April.
The surge largely reflected investors’ optimism after the launch of Shanghai-Hong Kong Stock Connect, the central bank said, adding that foreign money also flowed into Taiwan when the likelihood of Shanghai and Taipei stock connect surfaced in April.
The foreign exchange reserve of Switzerland soared US$17.9 billion to register at US$554.4 billion in April, while the reserve of Japan grew US$4.5 billion to more than US$1.19 trillion, the central bank said.