Despite the panic selling that has hit global stock markets over the past week, it is not the right time to suspend trading on the local bourse, Executive Yuan Secretary-General Hsueh Hsiang-chuan (薛香川) said yesterday.
Although the local stock market lost ground last week, it fared relatively well compared to its US and European counterparts, Hsueh said.
JUST ONE PROBLEM
“All we need now is more confidence,” Hsueh said.
Hsueh made the remarks during a question-and-answer session at an Internal Administration Committee meeting at the legislature yesterday morning.
Hsueh said the government had taken steps to stop the stock market from falling and that the efforts had so far been quite satisfactory and effective.
“Last week, the Dow Jones fell 18 percent, the stock market in Germany dropped about 22 percent and it’s worse for Japan, as its market dropped more than 10 percent in just one day,” he said. “But Taiwan’s market fell only 10 percent last week.”
While conceding that the situation was delicate despite the government’s efforts to restore confidence in the market, Hsueh said the stock market “would have been hit even more seriously if we had just sat and done nothing.”
He said the subprime mortgage crisis facing the US did not exist in Taiwan and that “the main problem with our economy is a lack of confidence.”
HARD AT WORK
Hsueh said the Cabinet was working hard to overcome the challenges and was taking every possible measure to stabilize the stock market and calm investors in the face of the disastrous nosedives on stock markets abroad.
“I am urging the country to face the problems courageously and to concertedly work out solutions,” he said.
In a contingency move, the government on Sunday said it would halve the daily limit on share price declines for one week and extended a ban on short selling on the Taiwan stock exchange in an attempt to avoid the panic selling that has overtaken global stock markets.
Local shares, which are normally restricted to rising or falling 7 percent in trading sessions, were limited to a decline of 3.5 percent as of yesterday.
Commenting on the stock market’s performance yesterday — the first trading day after the government halved the limit — Vice Premier Paul Chiu (邱正雄) said the market was doing fine in terms of the transaction volume.
That the change did not result in low trading volumes on the TAIEX meant that investors remained confident about the market, Chiu said.
Chiu made the remarks at an award ceremony held by the Ministry of Economic Affairs.
Chiu declined to comment on whether the government would extend the measure, which ends on Friday.
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