The National Stabilization Fund (NSF) reported a net profit of NT$33.7 billion (US$1.08 billion), with a return rate of more than 56 percent, after all its shareholdings were sold recently, the Ministry of Finance said yesterday.
The ministry said that NT$31.9 billion derived from share sales and NT$2.4 billion came from dividend gains with financing costs of NT$700 million, adding that the total gains would go into the government’s budget for the next fiscal year.
The fund earned about NT$25 billion in the first quarter of this year, NT$4.73 billion in the second quarter and nearly NT$4 billion in the third quarter from share sales, the ministry’s data showed.
The return rate of 56 percent was the highest in the fund’s history.
“Now that the TAIEX is hovering above 8,000 points, there is no need for the National Stabilization Fund to buy shares to help support the momentum of the local bourse,” a ministry official said by telephone following the fund’s regular quarterly meeting.
The fund began buying shares in September 2008 at the outset of the global financial crisis to help stabilize local markets when the TAIEX dropped to about 5,700 points. The fund eventually bought a total of NT$59.9 billion in shares.
The fund began disposing of its shareholdings on Jan. 15 this year when the TAIEX rose past 8,000 points, and it completed all the sales in the third quarter of this year, the ministry said.
In July, Minister of Finance Lee Sush-der (李述德) said the fund remained ready to buy or sell shares depending on current market conditions.
“When the stock market improves, we must dispose of shareholdings,” he said.
The fund was established in January 1990 via the Regulation on the Establishment and Management of the National Stabilization Fund (國家金融安定基金設置及管理條例).
The regulation authorizes the government to use the fund to intervene in the financial market to in order to maintain stability whenever investor confidence is shaken by major incidents in the country or abroad, or when significant international capital movements cause disorder in capital and financial markets and threaten the nation’s stability.
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