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No gains, more pains for Taiwan stocks

Taiwan dollar tanks due to 'global exodus from Taiwan stocks,' Bloomberg reports

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Taipei financial area in Xinyi District. (Taiwan News, Jules Quartly photo)

Taipei financial area in Xinyi District. (Taiwan News, Jules Quartly photo)

TAIPEI (Taiwan News) — The worst first half year performance on record for the Taiwan dollar was reported by Bloomberg on Monday (July 4).

The Taiwan dollar has slid about 7% so far this year and could well hit a two-year low of 30.3 to the U.S. dollar by September. Bloomberg said the cause was “US$34 billion of foreign outflows from Taiwan equities this year, the most in emerging Asia outside China.”

Just last month, in June, the TAIEX dropped 11.79% or 1,982.04 points, the biggest loss since September 1990. This is said to be due to the Russia-Ukraine war, high inflation worldwide and rising interest rates.

Major banks and the U.S. in particular are sucking in capital from emerging markets. Bloomberg quotes Barclays as saying there could be outflows of about US$8 billion over the next few months.

Even so, Taiwan’s economic fundamentals are said to be sound and investors were called upon to remain calm by Deputy Minister of Finance Juan Ching-ha (阮清華), who is also executive secretary of the National Financial Stabilization Fund (NFSF). Trade figures and revenue figures were also positive, he added per Aljazeera,

Juan said if there were further losses and it was necessary, the NSFS could step in. Taiwan’s economic growth has been marked down to less than 4% for this year.