The stock market will soon receive a boost from the Council of Labor Affairs, which will inject a total of NT$44 billion (US$1.35 billion) into the market.
The Bureau of Labor Insurance announced on Tuesday that 10 investment trust operators have passed the qualification review to manage the fourth release from the Labor Insurance Fund.
The NT$20 billion fund will be allocated to fund managers next month.
To pass the review, investment trust companies must manage more than NT$1 billion in equity funds and have achieved a high return.
The news comes amid a slump on the local bourse.
The TAIEX fell 63.96 points, or 1.01 percent, to close at 6,299.59 yesterday, after plunging 219.49 points, or 3.33 percent, on Tuesday because of market concerns over interest rate hikes abroad and domestic political unrest.
The fund managers chosen include First Global Investment Trust Co (元大投信), Jih Sun Securities Investment Trust Co (日盛投信), Grand Cathay Securities Investment Trust Co (大華投信), Prudential Financial Securities Investment Trust, ING CHB Securities Investment and Trust Co.
Each will be entrusted NT$2 billion of the fund, the council said.
The 10 fund managers will operate the fund for three years with a target return of 7 percent.
The third release from the Labor Insurance Fund was made on Oct. 1, 2004.
As of May 31 this year, the NT$20.5 billion fund received an average return of 36.16 percent, according to council statistics.
Invesco Taiwan Ltd (
The latest release will bring the total of Labor Insurance Fund money entrusted to fund managers to NT$50 billion, the council statement said.
The council announced last Wednesday that eight investment trust operators, including Capital Investment Trust Corp (群益投信), HSBC Investments (Taiwan) Ltd and Fuh Hwa Securities Investment Trust, would manage a NT$24 billion Labor Pension Fund. Each of the eight were given NT$3 billion to manage yesterday.
According to council statistics, from June 21, 2004 to April 30, this year, the council entrusted NT$16.5 billion from the Labor Pension Fund with a reported an average return of 34.24 percent.
"I think the injection of the funds will help bolster the local bourse," a fund manager at one of the entrusted operators said yesterday on condition of anonymity.
"The TAIEX has tumbled from the previous high of more than 7,000 points, making it a good time to do bottom fishing," the manager said.
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