Taiwan Sees Sharp Capital Outflow Drop to US$1.2B. in October

Taiwan's net capital outflow dropped to US$1.2 billion in October, less than half the US$3 billion recorded a month earlier, according to statistics released by the Financial Supervisory Commission (FSC).

The FSC explains that the shrinking outflow implies the return of foreign funds in response to the expected improvement of the island's business climate. Finance Minister S. F. Chang also believes that Japanese investors may increase their involvement in Taiwan's stock market because of the Japanese government's recent adoption  of a policy of quantitative easing that will release more capital into the market.

Chang emphasizes that Taiwan's stock market fundamentals are strong, with the island's economic growth, exports, and industrial production index all hitting new highs in October. This fact was reflected in massive overbuying by foreign investors in the stock market on Oct. 31.

As of the end of October Taiwan's net outflow of capital for the year had accumulated to US$190.324 billion, representing a slight drop of US$1.28 billion compared with the previous month. (JL)