Reported about 1 year ago
According to the reporter Liao Pei-jun from Taipei reporting on July 7, 2024, at 6:28 pm, the Financial Supervisory Commission revealed that the banking industry has massively poured 32.1 billion dollars into stock investments in May, totaling an additional 115.3 billion dollars in the first five months of the year, creating three wonders: the largest monthly and year-to-date investment amounts recorded, the highest increase among the three industries, surpassing even securities firms, and reaching a record high unrealized profit of 377.3 billion dollars at the end of May. The banks' heavy investment in Taiwan stocks in May is attributed to two main reasons: firstly, preparing for the upcoming ex-dividend season in the third quarter to secure dividend income, and secondly, maintaining a positive outlook on the future of Taiwan stocks. With Taiwan stocks stabilizing above 23,000 points in June, showing a significant 8.7% monthly increase, the banking industry has emerged as the big winner in this stock market wave, reaping substantial capital gains and dividend income. Despite the Federal Reserve's indication of a slower pace in interest rate cuts in the third quarter, signaling a mild slowdown in the global economy, and the need to be cautious towards the end of the year as economic trends may shift due to factors like Taiwan's high export base effect affecting year-on-year growth rates and the manufacturing industry's inventory replenishment exceeding six months, influencing stock market fluctuations. By the end of May, the total domestic and foreign stock investments by the financial industry reached 3.6892 trillion dollars (book value), showing a 2.14% monthly decrease, compared to significant increases of 3.8% in the Taiwan stock market and 4.8% in the US S&P index. This demonstrated that insurers' selling pressure offset the investments made by banks and securities firms. In May, banks invested 32.1 billion dollars in stocks for the seventh consecutive month, with a total additional investment of 115.3 billion dollars in the first five months of the year, 1.6 times the amount invested in the same period last year. The monthly and year-to-date investment amounts by banks significantly surpassed securities firms, with securities firms investing 23.5 billion dollars in May and a total of 87.4 billion dollars in the first five months. Combined, banks and securities firms invested a total of 55.6 billion dollars in May and 202.7 billion dollars in the first five months to bolster Taiwan stocks. Insurers continued to sell stocks, with the total value of Taiwan stocks held by insurers dropping to 1.967 trillion dollars at the end of May. This led to a 0.6% monthly decrease, contrasting with the 3.8% increase in Taiwan stocks during the same period. It is estimated that insurers sold 88.1 billion dollars' worth of stocks in May, continuing the downward trend for a total reduction of 282.5 billion dollars in Taiwan stocks. Insurers' active selling actions offset the investments made by banks and securities firms, resulting in an overall net divestment of 32.5 billion dollars in May and 79.8 billion dollars in the first five months. Looking at international stock markets, insurers' total value of foreign stocks held was 545.2 billion dollars at the end of May, showing a 2.3% monthly increase compared to the 4.8% increase in the US S&P index during the same period. It was estimated that insurers cut their US stock positions by 13.5 billion dollars, with a total reduction of 197 billion dollars in the first five months. Market analysts believe that insurers are still burdened by high hedging costs, particularly as the third quarter may bring more fluctuations in the US dollar, prompting insurers to shift their investment strategies towards capital gains, possibly continuing the trend of selling stocks to secure profits in the short term.
Source: YAHOO