TAIPEI, March 4 (Reuters) – Singapore sovereign wealth fund sold Taiwanese stocks last week, disrupting the island’s brutal course, three sources with direct knowledge of the situation told Reuters.
Taiwan’s benchmark stock index is up about 8% so far this year, driven by the island’s critical economy which has benefited from global demand for its technological products at the time of the pandemic. forced millions to work and study from home.
Last year the index rose almost 23%, outperforming the 16% increase for Japan and a nearly 14% gain for China, Taiwan’s largest trading partner.
On Friday, the index closed down more than 3%, with foreign investors selling T $ 222.7 billion ($ 8.01 billion) in Taiwanese stocks while buying T $ 128.3 billion, inter- net difference of T $ 94.4 billion.
The sources, who spoke on condition of anonymity because they were not authorized to speak to the media, said GIC was involved in these sales, although they did not say how much they sold.
One source said sovereign wealth funds have been looking at Taiwanese stocks as “ATMs” due to the COVID-19 pandemic due to their strong performance backed by the island’s strong economic base.
Taiwan’s central bank, which regulates the foreign exchange activity of foreign players in the island’s financial markets, has not responded to a request for comment.
GIC had no immediate comment.
Despite the lack of formal diplomatic relations with the so-called China island, Singapore and Taiwan have close ties.
Foreign investors make up about one-third of Taiwan’s stock trades.
Last month the Taiwanese government revised its outlook for 2021, predicting that the economy will grow at the fastest pace in seven years, seeing a gross domestic product (GDP) rise. ‘4.64% increase in exports driven by technical demand. ($ 1 = 27.8190 Taiwan dollars) (Reporting by Liang-sa Loh; Additional Report by Anshuman Daga in Singapore; Written by Ben Blanchard; Editing by Christopher Cushing)