For­eign in­vestors dump shares, re­mit gains out of Tai­wan

The China Post - - LOCAL - BY JOHN LIU

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.

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