The management committee of the state-owned National Stabilization Fund yesterday said it had decided not to sell the equities it had purchased in order to stabilize the stock market.
Amid the global downturn, the government began using the fund on Sept. 10 to prop up share prices, extending its use from one month to three months.
The government pumped NT$60 billion (US$17.6 billion) into the market during the three months last year when the TAIEX fell to a record low, an official said on condition of anonymity.
The official said the fund had a rate of return of about 15 percent, based on the book value of the shares it had purchased, increasing its value by NT$2 billion.
The fund’s earnings from stocks could be as high as NT$10 billion if cash and stock dividends from the investments are taken into account, the official said.
Yesterday, the benchmark TAIEX closed at 5857.64, hitting a six-month high and returning to the level when the government decided to mobilize the fund to boost the market.
Despite the rebound in share prices in recent months, the management committee decided not to begin selling the fund’s assets, saying that would not be done until the stock market has stabilized.
The fund was looking at a potential loss of as much as NT$6 billion when the TAIEX was below 4,400 points.