The nation’s securities account balance, a gauge of retail investors’ confidence in local equities, rose to its highest level in four months last month, as the TAIEX maintained its upward momentum from the previous month, data released by the central bank showed on Thursday.
The securities account balance increased for a second consecutive month to NT$3.34 trillion (US$106.70 billion), up NT$46.2 billion from NT$3.29 trillion in the previous month, the data showed.
In terms of the proportion of market transactions, retail investors accounted for 56.7 percent of the trading volume, compared with 56 percent one month earlier, while foreign institutional players accounted for 30.8 percent, down from 33.5 percent, the data showed.
Photo: Bloomberg
The central bank’s latest data reflected that stock market sentiment remained bullish in the past two months as the TAIEX averaged 17,570 points last month, up from 16,978 points in November and 16,422 points in October.
The daily average turnover on the local bourse also expanded to NT$292 billion last month, compared with NT$271.4 billion in November and NT$248.5 billion in October, the data showed.
The benchmark index yesterday closed at 17,995.03 points, down 0.04 percent from the previous session but having risen 0.4 percent so far this month, the Taiwan Stock Exchange’s data showed.
“The securities account balance last month hit the third highest on record and the annual growth rate in M2 money supply is still within the central bank’s target of between 2.5 percent and 6.5 percent despite five interest rate hikes since March 2022, indicating that funding activity in the private sector remained vibrant and the liquidity level in the entire market is still abundant — which is beneficial to consumption, the stock market and other investment activities,” Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Thursday.
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 3.11 percent, up from a 3.03 percent increase in November, the central bank said in a report, attributing the increase to faster annual growth in passbook savings deposits.
The annual growth rate in broader measure M2 — which includes time deposits, time-saving deposits, foreign currency deposits, mutual funds and M1B — slowed to 5.3 percent from 5.33 percent, due to a sequential decrease in net foreign capital inflows, it said.
For the whole of last year, M1B rose 2.82 percent and M2 advanced 6.25 percent from a year earlier, central bank data showed.
“The latest money supply data show that the liquidity in the nation’s financial system remains sufficient within a neutral-to-loose monetary policy environment, which is conducive to overall economic growth,” Yuanta said.
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