The National Stabilization Fund (NSF, 國安基金) yesterday decided to exit the local stock market, saying it has achieved its goal of stabilizing the local bourse, which has rallied firm above 12,000 points since the fund’s previous meeting in July.
The National Stabilization Fund Committee said it made the decision at its quarterly meeting because the TAIEX has made a comeback from its March lows.
“There are no major events at home and abroad that might dampen investors’ confidence and throw the financial market into disarray,” it said, adding that it was time to allow the market to return to normalcy.
Photo: Liu Hsin-de, Taipei Times
The NT$500 billion (US$17.29 billion) fund made a high-profile entry into the market on March 19 after the TAIEX slumped to 8,681.34 amid a global meltdown caused by draconian lockdowns in major countries after the COVID-19 epidemic was declared a pandemic.
The main board has since swelled 49.27 percent to close at 12,955.91 points yesterday on a large turnover of NT$228.745 billion, Taiwan Stock Exchange data showed.
Minister of Finance Su Jain-rong (蘇建榮) told a legislative meeting that the fund has stayed put since April, after spending NT$757.19 million in March.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday rose 1.55 percent to a new high of NT$460, while chip designer MediaTek Inc (聯發科) picked up 6.57 percent to NT$714.
As of Sept. 30, the fund saw NT$217.13 million in unrealized capital gains and an additional NT$34.74 million in dividend income, suggesting a 30 percent return over 207 days, the committee’s statement said.
The figures wrapped up the second-longest intervention by the fund with record-low cash.
Authorities would continue to monitor international political and economic developments, and the fund could step in again whenever necessary, the committee said.
Though uncertainties linger, Taiwan is outperforming most other nations in GDP growth this year due to its quick control of the outbreak, it said, adding that global monetary easing would lend support to economic and financial activity around the world.
While the market might have negative readings of the fund’s departure in the short term, it is expected that the release of corporate earnings reports would provide certain catalysts, analysts said.
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