Taiwanese market sees large outflow of foreign capital

By Kathryn Chiu, The China Post

TAIPEI, Taiwan — Amid the massive pullback of foreign capital, foreign institutional investors (FINIs) in Taiwan recorded a net fund outflow of US$256 million last week — the second largest after South Korea in regional markets. The United Evening News on Monday reported that emerging markets in Asia lost 0.9 percent after the World Bank reduced its economic growth outlook for some Asian economies and sparked a flight of foreign capital. Taiwan and South Korea saw the biggest equity outflows in Asia last week. Taiwan had outflows of US$256 million while South Korea lost US$700 million, according to the United Evening News. Foreign institutional investors sold a net NT$8.16 billion in shares on Monday, after dumping a net NT$9.59 billion in shares last week. Taiwan’s stock market also came under pressure because foreign institutional investors continue to move their funds out of the region to chase U.S. dollar assets in view of the growing strength of the greenback, according to Taishin Securities Investment Trust Co. fund manager Shen Chien-hung (沈建宏). Net Selling Continues Taiwan Stock Exchange (TWSE, 台灣證券交易所) yesterday said that the position of securities net oversold by foreign investors was NT$9.58 billion during the week of Oct. 6-10. This represented the difference between NT$91.94 billion securities bought and NT$101.52 billion securities sold. A week earlier, the position was NT$26.39 billion during the week of Sept. 29-Oct. 3. This represented the difference between NT$121.64 billion securities bought and NT$148.03 billion securities sold. The accumulated net overbought position by foreign investors, during the period year to Oct. 9, was NT$283.62 billion. This represented the difference between NT$4.36 trillion securities bought and NT$4.08 trillion securities sold. The market capitalization of the shareholdings of foreign investors was NT$9.49 trillion as of Oct. 9, or 37.42 percent of total market capitalization. This is lower than that a week ago by NT$136.72 billion. The three securities that reported the highest overbought positions by foreign investors during last week were Mega Financial Holding Co. (兆豐國際) 17,256, China Steel Corp. (中國鋼鐵) 14,806 and China Development Financial Holding Corp. (中華開發金控) 13,468.

The three securities that reported the highest oversold positions, in terms of thousand shares, by foreign investors during the last week were Innolux Corp. (群創光電) 39,193, Compal Electronics Inc. (仁寶電腦) 23,269 and Taishin Financial Holoding Co. (台新金控) 22,124.