The National Stabilization Fund (NSF) is not to exit the local bourse before the next routine meeting of the fund’s steering committee on Oct. 15 even though the market has recovered some confidence, Deputy Minister of Finance Wu Tang-chieh (吳當傑) said yesterday.
Wu made the statement after lawmakers on the legislature’s Finance Committee paid a visit to the ministry to gain better understanding of the state-owned fund’s operations.
The Cabinet on Aug. 25 resolved to authorize Wu, executive secretary of the fund’s steering committee, to activate the fund to prop up the market.
Photo: CNA
The TAIEX lost 5.7 percent last month, its fourth straight monthly decline, following a 7.1 percent fall in the previous month. It was the largest two-month decline since August 2011, according to JPMorgan Securities Ltd’s data.
Analysts said the weak market performance was mainly due to a global equity sell-off on concerns over a slowdown in global growth and a foreign exchange sell-off following China’ yuan devaluation. The weaker-than-expected GDP growth in Taiwan last quarter also added more bearish sentiment to the market, they said.
“The TAIEX had, as of Wednesday, gained 8.43 percent since the government activated the fund on Aug. 25 to shore up local shares,” Wu said.
By contrast, the Philadelphia Semiconductor Index had risen 6.57 percent, South Korea’s KOSPI index had increased 4.67 percent, the NASDAQ had advanced 4.94 percent and the Dow Jones Industrial Average was up 3.02 percent over the same period, while shares in Hong Kong and China had fallen 1.49 percent and 1.55 percent respectively, according to the fund’s statistics.
The TAIEX yesterday closed up 0.75 percent at 8,095.95 points. The benchmark index has risen 0.99 percent so far this week.
Wu said the fund's committee, which aims to stabilize the market rather than seeking profit, would decide if it should stay on or withdraw from the stock market at its regulator meeting on Oct. 15.
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