With foreign investors selling off local shares amid the COVID-19 pandemic, Taiwan saw a net foreign fund outflow of US$15.45 billion in the first 10 months of the year, compared with a net foreign fund inflow of US$9.09 billion a year earlier, data compiled by the Financial Supervisory Commission (FSC) showed.
With net outflows already hitting a high of US$15.45 billion in the first 10 months, net outflows for the full year could break 2008’s record of US$12.83 billion, the FSC said.
Last month, Taiwan registered a net foreign fund inflow of US$2.06 billion, ending two consecutive months of outflows, the data showed.
The net inflow could be attributed to new foreign direct investments instead of foreign investors increasing their holdings of local shares, as foreign institutional investors — who own about 40 percent of local shares — sold a net NT$26.2 billion (US$907.3 million) of local shares last month, the data showed.
They sold a net NT$27.3 billion of Taiwan Stock Exchange (TWSE) listed shares, while buying a net NT$1 billion of Taipei Exchange traded stocks, the data showed.
For the first 10 months, although the TAIEX rallied in light of an improving domestic economy and growing technology industry, net sales of local shares by foreign institutional investors reached NT$769.2 billion, the data showed.
The difference between fund outflows and share sales is likely a result of some investors not transferring the funds overseas after selling the shares because they were looking for other investment targets, an FSC official said on condition of anonymity.
It is difficult to ascertain whether the trend would turn to outflows again as the US presidential election has caused volatility in the world markets, the official said.
For the first week of this month, foreign investors bought a net NT$52 billion of TWSE shares, exchange data showed.
The TAIEX yesterday closed up 0.42 percent at 12,973.53 on turnover of NT$182.952 billion, posting a year-to-date return of 8.14 percent, TWSE data showed.
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