Tue, Oct 16, 2012 - Page 13 News List

State-run fund prepares to exit the stock market

EVERYTHING MUST GO:The National Stabilization Fund is to sell its remaining holdings of local shares and it anticipates they will be gone by the end of the year

By Amy Su  /  Staff reporter

The state-run National Stabilization Fund (國家金融安定基金) has earned a net total of NT$3.73 billion (US$127.1 million) on the local stock market as of the end of last month since it was authorized to start selling its holdings in local shares on April 12, a Ministry of Finance official said yesterday.

The fund will continue to sell its remaining holdings of local shares, valued at NT$452.52 million, with all of its holdings scheduled to be sold in the near future, the official said.

“We will sell these holdings as soon as possible,” Vice Minister of Finance William Tseng (曾銘宗), who is also the executive secretary of the fund’s management committee, said by telephone.

Tseng said he expected all of the fund’s holdings left in the securities market to be sold before the end of the year.

The committee authorized the fund to step into Taiwan’s stock market on Dec. 20 last year, instructing it to buy stocks during sharp declines amid a period of global economic uncertainty, while setting the fund’s exit date at April 12.

The fund spent a total of NT$42.9 billion in the stock market, buying shares during that period and helping to stabilize the market, Tseng said.

As of the end of last month, the fund has earned a net total of NT$3.73 billion, with the rate of return standing at 8.73 percent, despite profit seeking not being the fund’s primary goal, he added.

Commenting on the recent downturn on the stock market, as well as the contraction in securities turnover, Tseng said there are no conditions matching the criteria for the committee to authorize the fund to intervene in the market again.

The net value of the fund totaled NT$3.62 billion as of the end of last month, up NT$1.26 billion from the end of June, mainly driven by cash dividends income, the ministry said in a statement.

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