Financial Supervisory Commission Chairman Gordon Chen (陳樹) yesterday urged stock investors to remain calm and rejected a newspaper report that more than 20 listed companies might be experiencing financial difficulties.
“The report’s information has been proved wrong,” Chen told a media briefing yesterday, referring to the front-page article in yesterday’s Chinese-language Economic Daily News, which cited a study by business information provider Dun & Bradstreet Inc (D&B).
Chen said that nine of the 20 “financially troubled” companies cited by D&B — including mobile service provider First International Telecom (大眾電信), HTS Technology Co (新泰伸) and Ya Hsin Industrial Co (雅新實業) — were not traded on either the TAIEX or the GRETAI.
In addition, shares of six of the 20 companies had had their stocks banned from trading on the stock exchange.
Another two companies — Optodisc Technology Corp (遠茂光電) and Far Eastern Air Transport Corp (遠東航空) — have made public their plans to delist from the GRETAI later this month or next month, the commission said.
Chen said the stock exchange had long had an early warning system that effectively identifies potential company failures.
Investors should not panic so easily over groundless market rumors, he said.
The stock exchange will look into the accuracy and appropriateness of the US-based investment adviser’s report before considering taking action against possible market manipulation or mistakes, Chen said.
He did not say what action the commission could consider against D&B or the newspaper.
Asked about the slump in local equities in recent months, Chen said it had to do with the recent exodus of foreign capital from the local stock market.
However, he said the capital outflows were purely an investment decision based on the capital liquidity of international funds in various markets and their global capital allocation.
Chen dismissed speculation that foreign investors were misleading the government by saying the valuation of local shares was attracting their interest, while actually offloading shares to government-owned funds.
“When they talked to us earlier, I felt that they were sincere [about injecting capital into the local stock market],” Chen said.
The Taiwan Stock Exchange Corp yesterday also dismissed the D&B report, saying it was not fair to judge a company’s financial health based solely on its payment records and that credit, debt, liquidity and other indicators should be factored in.
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