The TAIEX may see a capital injection of as much as NT$82.3 billion (US$2.6 billion) if some publicly traded companies, including 12 financial holding firms, decide to buy back their shares, Financial Supervisory Commission (FSC) Vice Chairman Wu Tang-chieh (吳當傑) said yesterday.
“A lack of confidence is the reason behind the TAIEX’s recent nosedive,” he said. “But investors should remain calm, since the nation’s economic fundamentals remain sound.”
Wu said that while public companies’ pre-tax profits fell by NT$102 billion in the first half of this year compared with the same period last year, NT$48 billion, or 8 percent of their total pre-tax profits, were allocated for employee bonuses, which “shows corporate earnings weren’t as bad as expected.”
Wu said that the Taiwan Stock Exchange Corp (TWSE) and the GRETAI Securities Market have formed a task force to review measures to prop up the markets.
The task force said 91 listed companies are highly under-valued and oversold, including Chunghwa Picture Tubes Ltd (華映), HannStar Display Corp (瀚宇彩晶) and Taiwan Business Bank (台灣企銀), making them good investments for investors who are bottom-fishing.
The task force will arrange investors’ conferences for these 91 firms.
The task force is also in talks with 92 other companies, including 25 firms trading on the GRETAI, which are qualified to buy back their shares, Wu said.
He said the commission would encourage institutional investors to buy shares with their own capital.
After the FSC advised the directors of 40 boards to buy back their shares, some NT$510 million worth of shares were bought by them, he said.
To promote sales of domestic exchange-traded funds, the investment and trust companies said they would waive transaction fees.
The Securities Investment Trust & Consulting Association (投信投顧公會) will also shorten its pre-review period for new funding plans from seven days to three, Wu said.
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