Fri, Sep 25, 2015 - Page 13 News List

Tseng sidesteps fund speculation

By Ted Chen  /  Staff reporter

Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) yesterday refused to comment on speculation that the National Stabilization Fund would be deactivated in the middle of next month as the TAIEX continues to perform listlessly on sluggish turnover.

“As the fund is governed by the Executive Yuan, it is not appropriate for the FSC to comment on the matter,” Tseng said while responding to lawmakers at a question-and-answer session during a meeting of the Finance Committee at the legislature in Taipei.

The state-run fund is to hold a routine meeting in the middle of next month to review its performance, with a progress report likely to be released afterward.

Chinese Nationalist Party (KMT) Legislator Lu Hsiu-yen (盧秀燕) said that government policies play a decisive role in influencing the TAIEX at a time when domestic investment sentiment is fragile.

To illustrate, Lu said that in the months after the commission relaxed the daily stock-trading band to 10 percent from 7 percent in a bid to be more in line with international norms, the TAIEX had plunged by 2,400 points.

By contrast, the TAIEX had posted a 265.3-point rally on Aug. 25 after a 376.58-point tumble the previous session when a ban on short-selling came into effect, but only to take another 155.1-point dive when the ban was lifted on Monday, Lu said.

“The short-selling ban is among the more extreme form of market intervention and its deployment greatly hampers liquidity and market mechanisms,” Tseng said, adding that Monday’s plunge had more to do with the sharp declines seen on US markets.

As investment sentiment is fragile, the National Stabilization Fund’s exit should be based on the local bourse’s performance, such as when TAIEX reaches 9,000 points, Lu said.

However, Lu’s prompting failed to produce a response from Tseng.

Instead, Tseng said that contributions from active traders and net capital inflows by foreign institutional investors are expected to make a gradual return to the market once uncertainties over adjustments to the capital gains tax have been cleared up.

The TAIEX yesterday shed 0.86 percent to close at 8,123.1 points on turnover of NT$82.19 billion (US$2.47 billion).

Lu also criticized the commission for failing to detect overworking and other work-place infractions in the financial sector.

The commission in late April maintained that there were no incidences of such practices in the financial sector, only to be proven wrong by a Ministry of Labor audit conducted earlier this month that 31 of 32 banks were found to have failed to pay overtime to their employees.

“Does the FSC and its Banking Bureau tolerate lies from the companies they regulate?” Lu asked.

Tseng responded that the commission would look into the matter, and that banks would pay the consequences for violations of internal controls and auditing guidelines.

This story has been viewed 1423 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top