The government decided to activate the state-owned National Stabilization Fund (國安基金) yesterday, an overnight change made ahead of the stock market opening, but it refused to reveal details of how the fund would act.
“The economic fundamentals of this country are still stable, but in view of the sharp decline in the US stock market on Sept. 17 and possible volatility in international financial markets … conditions are right for the fund to enter the stock market,” the fund’s management committee said in a statement.
The press release was issued at 10:10am, just over an hour after the TAIEX had opened down 242.82 points from its close on Wednesday, a drop of 4.19 percent. The benchmark index gained as the day progressed, ending 158.92 points down from Wednesday at 5,641.95, a drop of 2.74 percent.
At a press conference following the Cabinet’s weekly meeting yesterday, Minister of Finance Lee Sush-der (李述德) cited 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) to justify the decision to use the fund.
“Paragraph 1 of Article 8 of the regulation authorizes the government to use the National Stabilization Fund when confidence of investors might be shaken by major incidents in the country and abroad, or by significant international capital movement that would result in disorder in the capital and financial markets and could hurt the nation’s stability,” he said.
The decision was made at a meeting of the fund’s management committee yesterday convened by Vice Premier Paul Chiu (邱正雄), the second day in a row the committee has met to discuss the turmoil sparked by the US’ financial woes.
Lee, however, failed to give a clear explanation of why the government decided to activate the fund after the management committee decided on Wednesday that the fund should remain inactive for the moment.
Lee said the committee had made the most appropriate decision based on the economic and financial situation in domestic and overseas markets. But he did not say what specifically had sparked the shift.
“Members of the management committee said that Taiwan’s share prices had dropped below the level they are supposed to have, compared with global stock markets,” Lee said. “An important reason to use the fund was that the impact of international financial incidents on the country is likely to last for some time.”
Lee’s remarks appear to contradict Chiu’s statement on Tuesday, when he said the US financial trouble was expected to end soon as “it usually takes one-and-a-half years to get through an economic downturn,” a reference to the start of the US sub-prime mortgage crisis the summer of last year that triggered the current crisis.
Activating the National Stabilization Fund, which has NT$500 billion in capital, was one of a spate of measures the government has adopted to sustain Taiwan’s stock markets.
Lee refused to discuss details of the fund’s transactions, saying that the fund’s management committee would make the best decision on which shares to buy, the amount and the prices as a general investor.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
WHAT WAS ALL THAT FOR? Jaw Shaw-kong said that Cheng Li-wen had pushed for more drastic cuts and attacked him, just for the outcome to be nearly identical to his bill The legislature yesterday passed a supplementary budget bill to fund the purchase of separate packages of US military equipment, with the combined amount of spending capped at NT$780 billion (US$24.8 billion). The Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their legislative majority to pass the bill, which runs until 2033 and has two main funding provisions. One was for NT$300 billion of arms sales already approved by the US for Taiwan on Dec. 17 last year, the other was for NT$480 billion for another arms package expected to be announced by Washington. The bill, which fell short of the NT$1.25
‘CLEAR MESSAGE’: The bill would set up an interagency ‘tiger team’ to review sanctions tools and other economic options to help deter any Chinese aggression toward Taiwan US Representative Young Kim has introduced a bill to deter Chinese aggression against Taiwan, calling for an interagency “tiger team” to preplan coordinated sanctions and economic measures in response to possible Chinese military or political action against Taiwan. “[Chinese President] Xi Jinping [習近平] has directed the People’s Liberation Army to be ready to invade Taiwan by 2027. China has a plan. America should have one too,” Kim said in a news release on Thursday last week. She introduced the “Deter PRC [People’s Republic of China] aggression against Taiwan act” to “ensure the US has a coordinated sanctions strategy ready should
RSS