Lin calls for calm amid fluctuations

After foreign investors dumped shares for 16 consecutive trading days, Minister of Finance Lin Chuan (林全) yesterday urged local investors not to over-exaggerate the movement of foreign stock investors.

Stocks yesterday ended sharply higher after Wall Street's overnight gains and the government's announcement on Tuesday that it would use the National Stabilization Fund (國安基金) to prop up the stock market when necessary.

The TAIEX closed up 302.9 points, or 5.5 percent, at 5,860.58, with a turnover of NT$92.28 billion (US$2.74 billion). The index's 6.9 percent two-day gain was the biggest advance since Oct. 17, 2002.

Overseas investors yesterday sold a net NT$3.87 billion of shares, while domestic investment-trust investors and proprietary traders bought a net NT$5.81 billion, the Taiwan Stock Exchange said.

At a press conference held yesterday, Lin said that the recent fluctuations in local stock market have been in line with bourses elsewhere in Asia, except some trading days, when domestic political unrest intensified following the March 20 presidential election.

He also downplayed the up-and-down of foreign stock investments, saying that US$20 billion in foreign capital has flown into the country since last October while only US$2 billion has left the country.

The government announced on Tuesday night that it authorized the National Stablization Fund steering committee, which has NT$130 billion on hand, to buy stocks at the "appropriate time."

But Lin yesterday stayed mum on whether the committee was already using the fund to buy shares amid a stock market rally the day before President Chen Shui-bian (陳水扁) second inauguration.

``I won't comment,'' he said.

The Cabinet created the NT$500 billion fund in 1998 to buy shares in the event the stock market should tumble sharply on non-economic factors, such as military tensions with China or natural disasters.

``The government's announcement that the fund could come into the market at any time did bring in some positive impact on market sentiment,'' said Chu Yun-peng (朱雲鵬), head of National Central University's Research Center for Taiwan Economic Development.

But a key to lessening investors' concerns over political uncertainty lies on Chen's inauguration address, Chu told ERA News yesterday.

On the local bourse yesterday, gains came from all sectors, with the technology subindex up 5.4 percent, transport 6.6 percent higher and finance up 6 percent.

Chip giants Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) led the rise. TSMC rose 6.7 percent to NT$55.5 while UMC gained 6.6 percent to NT$27.4.

Makers of the flat panels also rose across the board, with AU Optronics Corp (友達光電) up 6.7 percent at NT$63.5 and Chi Mei Optoelectronics Corp (奇美電子) adding 6.4 percent to NT$67.