The Financial Supervisory Commission (FSC) is to introduce measures to boost the local bourse if trading volume remains light this week, FSC Chairman William Tseng (曾銘宗) said yesterday.
The benchmark TAIEX shed 1.14 percent to close at 9,134.65 on turnover of just NT$77.08 billion (US$2.55 billion), taking cues from weak Asian bourses and US equity index futures, Taiwan Stock Exchange data showed.
Tseng acknowledged he was surprised at TAIEX’s bleak showing, now that concerns over geopolitical and liquidity uncertainty have eased.
The nation’s top financial regulator predicted last week that investors at home and abroad would show more interest in local shares once Scotland settled its independence referendum and China’s Alibaba Group Holding Ltd (阿里巴巴) launched its initial public offering (IPO) in New York.
Normal and reasonable turnover — with Taiwan Stock Exchange and over-the-counter transactions combined — should hit NT$115 billion a day, Tseng said.
Tseng declined to comment on whether the commission would consider extending day trading to all local shares, rather than limit the practice to the 200 stocks underlying the Taiwan 50 Index, Taiwan Mid-Cap 100 Index and GRETAI 50 Index, or the so-called blue chips.
The commission first allowed day trading in January this year and approved its two-way operation in July after the market proved receptive to more volatility. The deregulation is believed to boost trading volume by 10 percent.
Foreign institutional investors slashed local shares by net NT$14.51 billion yesterday, while proprietary dealers cut net NT$2.56 billion and fund houses trimmed an extra net NT$38.93 million, according to Taiwan Stock Exchange statistics.
Tseng said foreign funds remained interested in the local bourse, where the world’s largest contract technology firms are listed.
The commission is to closely monitor the Shanghai-Hong Kong stock connect plan that is believed to attract funds from across the region once it takes effect on Wednesday next week, Tseng said.
Only professional investors in Taiwan can buy shares listed in China or Hong Kong through help from securities houses.
The commission has no intention of joining the connect scheme on concern that the opening might lure funds away from the local bourse, Tseng said.
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