Foreign institutional investors registered aggregate net sales of NT$77.03 billion (US$2.39 billion) of Taiwanese shares in the first nine months of this year as they dumped local equities during a rate hike cycle by the US Federal Reserve, the Financial Supervisory Commission said on Thursday.
Last month, foreign institutional investors sold a net NT$168.03 billion of shares on the local main board and the over-the-counter market — this year’s highest net sell for a single month so far, commission data showed.
Foreign institutional investors still recorded a net fund inflow of US$10.56 billion into Taiwan in the first nine months of the year, despite a US$3.28 billion net fund outflow last month, the commission said.
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Securities and Futures Bureau Deputy Director-General Julian Hwang (黃厚銘) said the net fund inflow in the January-to-September period demonstrated that foreign institutional investors remained confident in Taiwan’s equity market.
Hwang said the foreign institutional net sale came mainly from a spike in US Treasury yields following an aggressive Fed monetary policy, which prompted foreign institutional investors to keep money in US dollar-denominated assets.
As of late August, the average cash dividend yield on the local stock market was 3.64 percent and the total dividend yield including stock dividends was 3.74 percent, one of the world’s highest, indicating that the local market remains attractive, he said.
In the first nine months, the TAIEX rose 15.67 percent, outperforming other regional markets, the commission said.
While foreign institutional investors recorded a net sell, domestic institutional investors stood on the buy side, easing the impact of foreign selling, analysts said.
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