The Financial Supervisory Commission (FSC) yesterday announced a short-selling ban on the Taiwan Stock Exchange and the Taipei Exchange (TPEX), starting today, as it attempts to curb speculative trading amid “irrational declines on the stock market.”
Unlike previous bans imposed in 1998, 2008 and 2015, which applied to all stocks, this ban applies only to stocks that showed a decline of 3.5 percent or more a day earlier, Securities and Futures Bureau Deputy Director Sam Chang (張振山) told a news conference in New Taipei City.
The TAIEX fell 5.83 percent and the TPEX dropped 7.53 percent yesterday, and 1,233 stocks on the two boards reported declines of more than 3.5 percent, the commission’s data showed.
Photo: CNA
Tech heavyweights Taiwan Semiconductor Manufacturing Co (台積電) and Largan Precision Co (大立光) fell 3.69 percent and 9.72 percent respectively.
Short selling is when investors borrow securities, typically from brokerages, and then sell them, expecting the price will fall, to make a profit by buying them back later for less money.
“A short-selling ban can prevent speculators from betting against financial stocks, but it may also create more fear among ordinary investors. It is difficult to foresee if the measures would help,” an analyst told the Taipei Times by telephone on the condition of anonymity.
Short selling for the 1,233 stocks would be banned today, Chang said, adding that the number of stocks subject to the new measure would vary daily.
The ban would persist for stocks that continue to fall by 3.5 percent or more, he added.
“We want to curb volatility in the local markets amid a sell-off prompted by the fear of COVID-19, allowing respite for battered equities,” Chang said. “The local market appeared irrational, but not that crazy as it was in the [2008] financial crisis.”
Given that turnover on the main board stood at NT$269.74 billion yesterday, higher than the daily average of NT$146 billion last month, it indicated that many investors still had confidence in the local market, he said.
“Average daily turnover was less than NT$50 billion during the worst period in 2008. So the situation is much better now,” Chang said.
The FSC did not say how long the short-selling ban would last, saying that it would review the ban based on the COVID-19 pandemic situation.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS