The National Stabilization Fund (NSF) reported a net income of NT$29.73 billion (US$920.4 million) in the first half of the year, the Ministry of Finance said yesterday, adding that the fund sold off most of its shareholdings from March to last month.
The fund, which earned about NT$25 billion in the first quarter and NT$4.73 billion in the second quarter from share sales, had net total assets of NT$46.2 billion at the end of last month, with an unrealized profit of NT$531.85 million, the ministry said.
“There’s no so-called ‘exiting the market.’ [The fund] is always ready to buy or sell shares depending on market conditions,” Minister of Finance Lee Sush-der (李述德) told a media briefing following the fund’s regular quarterly meeting.
“The purpose of the stabilization fund is to maintain stability in the stock market. When the stock market improves, we must dispose of some shareholdings,” Lee said, adding that until the end of last month, the fund had a rather smooth run.
The fund began buying shares in September 2008 at the outset of the global financial crisis to help stabilize local markets, eventually buying NT$59.9 billion in shares.
Vice Premier Sean Chen (陳冲) declined to say at the briefing how much money the fund had invested in stocks or when the fund would sell further holdings.
“The stabilization fund has been selling its holdings since May last year. As of last month, the fund had sold NT$89.5 billion in shares, which it bought for NT$58.2 billion,” Chen said. “The NSF has also paid off all its debts of about NT$48.8 billion.”
“Overall, [the fund] had a steady performance [in the first half],” Chen said, adding that there was no need for the fund to enter the market for the time being.
Of the fund’s revenues of NT$31.36 billion in the first two quarters, the ministry said it had deposited NT$1.56 billion in special reserves and it still holds about NT$2.3 billion in shares.
Separately, Chen said the government’s real-estate policies were aimed at “normalizing transactions,” rather than cracking down on the housing market.
“All the government’s policies — such as making information more transparent in the real-estate market and protecting consumers — are aimed at normalizing transactions in the housing market and that is not a crackdown on the market,” Chen said.
Asked if the central bank is trying to stabilize the housing market, Chen said the bank just wanted to keep the financial market stable.
“If everyone knows the exact price transaction in a specific area under certain conditions, real estate speculators will certainly have less room to maneuver in the market,” Chen said.
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