Taipei, Foreign institutional investors in Taiwan recorded a net fund inflow in Taiwan in June, serving as a driver to solid gains enjoyed by the local equity market during the month, according to the Financial Supervisory Commission (FSC).
Data compiled by the FSC, the top financial regulator in Taiwan, shows that foreign institutional investors created a net fund inflow of US$1.878 billion in June after a net outflow of US$2.03 billion in May.
In the first four months of this year, foreign institutional investors registered a net fund inflow of about US$11.88 billion, according to the FSC.
Foreign institutional investors appeared keen to move funds into Taiwan in June, when rising optimism toward a possible solution to trade disputes between the United States and China prompted foreign investors to buy into Taiwan equities as U.S. President Donald Trump announced in a Twitter post in mid-June that he would meet with his Chinese counterpart Xi Jinping at the G20 summit held June 28-29 in Osaka.
The upbeat mood calmed many investors worldwide after a turbulent performance in the global equity markets in May, when Washington and Beijing raised punitive tariffs on each other's goods.
On the sidelines of the G20 summit, Trump and Xi agreed to stop a mutual tariff escalation and continue negotiations to resolve their trade dispute.
In June, the weighted index on the Taiwan Stock Exchange rose 232.34 points, or 2.21 percent, after a 4.28 percent decline in May.
The FSC said foreign institutional investors bought a net NT$52.40 billion (US$1.68 billion)-worth of shares on the main board and also registered a net buy of NT$12.01 billion-worth of shares on the over-the-counter market in June.
Due to the large foreign fund inflow and the net buy in local equities, the Taiwan dollar appreciated by NT$0.54, or 1.71 percent, against the U.S. dollar in June, which triggered the intervention of the local central bank in a bid to cap the appreciation.
As for Chinese institutional investors, however, they recorded a net fund outflow of US$4 million in June, the FSC data shows.
In the first six months of this year, foreign institutional investors recorded a net fund inflow of US$11.72 billion, with Chinese institutional investors registering a net fund inflow of US$185 million, the data indicates.
Since the government lifted a ban on foreign institutional investment in the local bourse at the end of 1990, a total US$209.24 billion in foreign net fund inflow into Taiwan has been recorded, the FSC said.
Source: Focus Taiwan News Channel