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Major market players down almost 25% in Q4 amid equity volatility

2019/01/12 17:40:23

Taipei, Jan. 12 (CNA) The number of major retail investors on Taiwan's stock market in the fourth quarter of last year fell almost 25 percent from the previous quarter, a reflection of equity price volatility, according to the Financial Supervisory Commission (FSC).

Data compiled by the FSC, the top financial regulator in Taiwan, shows that the number of retail investors who traded more than NT$500 million (US$16.23 million) in equities in one quarter fell about 370 or 24.55 percent from a quarter earlier to 1,137 in the October-December period.

The number of major equity market players is an indicator how interested retail investors are in trading stocks and whether local retail interest offsets selling from institutional investors or will provide a boost to the market at a time of foreign institutional buying.

As such, the trading interest of major retail market players is used to gauge market turnover.

The decline in the number of local major market players resulted from heavy losses on the stock market in the quarter amid increasing uncertainty at a time of trade tension between the United States and China as well as the rate hike cycle of the U.S. Federal Reserve caused plunges on Wall Street and other global financial markets, the FSC said.

Despite the fall, the number of major market players remained above the 1,000 mark for the sixth consecutive quarter, the FSC added.

Meanwhile, the number of retail investors who traded equities valued at NT$100 million-NT$500 million fell from 11,915 in the third quarter to 9,771 in the fourth quarter, the data showed.

In the fourth quarter alone, the weighted index on the Taiwan Stock Exchange or the Taiex fell 1,278.93 points or 11.62 percent to close at 9,727.41 on Dec. 28, the last trading day of 2018.

On Oct. 11, the Taiex fell 660 points to close at 9,806.11, marking the first time the index ended below the 10,000-point level since May 2017. In October alone, the main board fell 1,204 points. Except for three trading sessions since Oct. 11 -- Oct. 12, Dec. 3 and Dec. 4 -- the Taiex has remained below 10,000 points.

In the fourth quarter, the local main board fell 915.45 points or 8.6 percent.

In the wake of the decline in the number of major market players, turnover on the main board shed more than NT$185 billion from the previous quarter in the fourth quarter, the data showed.

On the over-the-counter (OTC) market, the number of investors who traded more than NT$100 million in equities also dropped 275 from a quarter earlier to 3,001 in the fourth quarter.

The OTC market index fell 7.52 percent in the fourth quarter.

(By Tien Yu-pin and Frances Huang)