Foreign investors show net fund outflows for 4th straight month

Taipei, Aug. 11 (CNA) Foreign institutional investors recorded a net fund outflow for the fourth consecutive month in July amid concerns over escalating trade friction between the United States and China, according to the Financial Supervisory Commission (FSC).

They posted a net fund outflow of US$2.53 billion in July, following net fund outflows of US$1.88 billion in June, US$1.09 billion in May and US$3.57 billion in April, FSC data showed.

The FSC said lingering fears over a trade dispute between Washington and Beijing, which have imposed additional tariffs of up to 25 percent on each other's goods and threatened more, have led foreign investors to move their funds into U.S. assets as a safe haven, especially at a time of weakness for regional currencies.

The U.S. dollar rose 0.37 percent in July against the Taiwan dollar and has continued to move higher in the first 10 days of August, closing at NT$30.708 against the Taiwan dollar on Friday.

In addition to unfavorable external factors, foreign institutional investors also repatriated funds out of Taiwan after receiving hefty cash dividends from their investments in local stocks, the FSC said.

That included about NT$160 billion (US$5.20 billion) from contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which issued its cash dividends on 2017 earnings on July 19.

Since the government lifted a ban on foreign institutional investments on the local bourse at the end of 1990, foreign institutional investors have accounted for an accumulated US$202.25 billion in net fund inflows into Taiwan, the lowest level since January 2017, when the figure stood at US$202.02 billion.

In the first seven months of this year, foreign institutional investors sold a net NT$253.91 billion in shares on the Taiwan stock exchange and a net NT$11.05 billion million in shares on the over-the-counter market, the FSC said.

Despite the net fund outflows, the FSC said Taiwan's listed companies have sound fundamentals and many of them are good investments, citing a 14.21 percent year-on-year rise in the combined net profit of the listed companies in Taiwan in the first quarter and a 9.34 percent year-on-year rise in first-half sales.

Source: Focus Taiwan News Channel