None of the funds used to prop up the local bourse have incurred actual losses as none of them have sold their shares, but they've lost nearly NT$150 billion on the books
The DPP administration has lost nearly NT$150 billion -- on paper -- propping up the stock market since last May, according to fund figures released over the past few days.
The total losses of the Labor Insurance Fund (
According to the Council of Labor Affairs (勞委會), after the TAIEX dropped below 5,000 point at the end of last year, the Labor Insurance Fund had lost NT$32.9 billion on its investment in the stock market last year. Meanwhile, the Labor Pension Fund lost more than NT$20 billion last year in its stock investment. The total losses in the two government funds exceeded NT$50 billion.
According to the latest figures from the Labor Insurance Fund prepared by Labor Insurance Bureau (
According to Central Trust Bureau (中央信託局), the total size of the Labor Pension Fund (勞退基金) was NT$210 billion at the end of last year. The ceiling for the fund to invest in the stock market was NT$63 billion. The actual invested amount was very close to that ceiling. About one-third, or NT$20 billion was lost in its book value.
This is the first time that Labor Pension Fund encountered a loss in its stock investment since 1993 when it was first used to prop up the market.
However, Council of Labor Affairs officials pointed out the neither of the funds have incurred actual losses as of yet as neither of the funds have sold their shares. Even if an actual loss occurs after selling, the government would subsidize the funds through the fiscal budget. No beneficiary of either of the two funds will be affected, they said.
According to the General Bureau of Post Offices (郵政總局), the Postal Savings Fund had lost over NT$50 billion last year in stock investment. The ceiling for the fund to invest in the stock market was set at NT$300 billion. It actually invested NT$200 billion by the end of last year. It lost about one-fourth of its investment in book value.
Even with the loss, the General Bureau of Post Offices has recently decided to give 6.4 months of year-end bonus to its staff, the highest bonus among all state-owned business.
In addition, there was another NT$200 billion under the National Stabilization Fund being put into stock market last year. The government has not disclosed its actual losses in the stabilization fund, but a loss of just one-fourth would generate NT$50 billion alone. Therefore it's reasonable to estimate that the total losses of the four government funds and the National Stabilization Fund last year would be approximately NT$150 billion in book value.
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