The National Stabilization Fund’s (NSF) steering committee will meet tomorrow to discuss when to dispose of its local share holdings and whether a market-exit mechanism should be established.
Minister of Finance Lee Sush-der (李述德) told a press conference yesterday that the fund aims to stabilize the stock market.
“The public should not listen to hearsay,” he said about rumors on the fund’s share disposal, adding that unconfirmed information would only cause panic.
PHOTO: MAURICE TSAI, BLOOMBERG
The fund, which was established by the government a decade ago to bolster the nation’s equities markets, bought domestic shares in late 2008, when the global financial crisis hit the nation.
Based on current market prices, Lee said the fund had an unrealized profit of between NT$20 billion (US$628 million) and NT$30 billion on NT$59.9 billion in shares it had bought in the local bourse.
Whether the NSF would be able to sell shares without the authorization of its board would be up to the steering committee’s resolutions, Lee said, noting that saying anything wrong, especially about the stock market, could easily cause a public upset.
Meanwhile, in response to questions of whether the ministry will impose a so-called “hot money” tax to curb foreign capital inflows, Lee said that the ministry respected the central bank’s monetary measures.
“The ‘hot money’ tax is not yet a policy, and the ministry still doesn’t know much about it. But as long as the purpose is correct and has a legal base, the ministry would look forward to it,” Lee said.
The central bank issued a statement on Tuesday that highlighted comments about capital controls from international agencies and famous economists in the face of continued foreign capital inflows.
Deputy Minister of Finance Chang Sheng-ford (張盛和) told the Taipei Times by telephone yesterday that imposing financial transaction taxes would be too slow a step to use to stem foreign capital inflows because a law regulating such a tax would have to be enacted first.
Chang would not comment when asked if the ministry would follow Brazil in levying taxes on foreign capital investment, but said that it was too early to talk about the tax implementation.
“Financial and administrative measures should be adopted instead,” he said.
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