A rout in the local stock market before it stabilized yesterday pushed margin debt down to NT$236.63 billion (US$8.45 billion) on Thursday, the lowest since NT$236.1 billion on April 7, and the figure is expected to drop further next week, Taishin Securities Investment Advisory Co (台新投顧) general manager Mason Li (李鎮宇) said yesterday.
Rising domestic COVID-19 infections would take a toll on local stocks, forcing more investors to face margin calls by their brokers, Li said by telephone.
“The viral spread continues to be the largest risk for the local stock market, as stricter measures against COVID-19 would hurt private consumption,” he said.
The TAIEX closed up 1 percent on 15,827.09 points yesterday, with market turnover of NT$510.512 billion, Taiwan Stock Exchange data showed.
Foreign institutional investors sold a net NT$13.66 billion of shares on the main board.
While the market staged a technical rebound, heavy plunges over the previous three sessions had forced brokers to sell shares held by investors trading on margin, but failing to cover losses in their stock accounts.
The forced selling drove margin debt down by NT$12.7 billion on Tuesday, NT$12.9 billion on Wednesday and NT$8 billion on Thursday, the data showed.
Thursday’s NT$236.6 billion was up 26.3 percent from NT$187.3 billion at the end of last year, but down by 14 percent from a nine-year high of NT$274 billion on April 29, the data showed.
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