05.11.2001
Can QFII investment save the market?

• In a bid to enhance foreign capital inflow amid weak stock market performance, the Ministry of Finance (MoF) yesterday announced a series of market opening measures. While the maximum limit of US$2.0b on qualified foreign institutional investors' (QFII) accounts is left intact, the following measures are to come into effect as early as next week:
  Cutting by 80% the net asset investment requirement for QFII, to US$200m from US$1.0b
  Cancellation of the requirement that foreign investors must be among the world's 1,000 largest in terms of asset size
  Lowering to just one year from three years the minimum time requirement of asset management experience

• In a press conference held yesterday evening, MoF officials said they expect the opening measures to attract some US$20b of foreign funds into Taiwan in 1H02. While we see these measures as a step in the right direction, we continue to believe that foreign capital inflow into the TAIEX will continue to be determined by the global technology cycle and the domestic political situation for the foreseeable future.

• Nonetheless, while there may be no immediate impact, these measures are certainly positive for the medium- to long-term outlook of Taiwan's stock market.

IrmakSurenkok@Primasia.com +886-[0]2-2547-8873