The Ministry of Finance on Saturday urged investors to stay calm after a spike in domestic COVID-19 infections and a global technology shares selloff unnerved the local stock market last week.
The ministry said that Taiwan’s economic fundamentals remain sound.
The Liberty Times (the Taipei Times’ sister newspaper) reported yesterday that Deputy Minister of Finance Frank Juan (阮清華) said that the government would pay close attention to the developments of the local stock market and the COVID-19 situation, adding that the National Stabilization Fund, of which Juan is the executive secretary, might hold an impromptu committee meeting on whether action is necessary.
The NT$500 billion (US$17.85 billion) fund was set up by the government as a buffer against unexpected external factors disrupting the local stock market.
Juan said that government agencies would hold meetings soon to discuss necessary stock market measures, including lowering the maximum allowable daily drop in equities, to help stabilize the market.
Domestic consumption, including catering and tourism, would likely be affected in the short term due to the tighter COVID-19 restrictions, he said, but added that import and export sectors, and manufacturing would not be affected.
The nation’s tightest restrictions, in place in Taipei and New Taipei City, triggered by a level 3 COVID-19 alert there, would not apply to the chipmaking hub of Hsinchu Science Park (新竹科學園區) — home of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Co (聯電), he said.
TSMC on Saturday said that it was closely monitoring the situation, adding that it had canceled nonessential gatherings and activities to reduce the movement of people across its facilities.
Exports are likely to be spared by the market rout, as companies in the semiconductor sector, which contribute more than 35 percent of total exports, have effective measures in place to prevent COVID-19 infections, Taishin Securities Investment Advisory Co (台新投顧) general manager Mason Li (李鎮宇) told reporters by telephone on Friday.
The TAIEX fell by 1,457.91 points, or 8.43 percent, last week to close at 15,827.09 on Friday, while the New Taiwan dollar fell 0.4 percent against the US dollar, closing at NT$28.012 on Friday.
Even though major European and US stock markets closed higher last week, a drastic surge in COVID-19 cases in the past few days has raised fears that the TAIEX would fall further when trading resumes today.
“Stocks are likely to fall tomorrow due to investor panic, as retail investors account for a large portion of the market, but the decline is not expected to be larger than last week,” Securities Investment Trust and Consulting Association chairman Jeff Chang (張錫) told reporters by telephone yesterday.
“Some investors were over-
reacting last week, as we’ve seen in other markets — the US and India, where the COVID-19 situation has been bad — that their indices have not fallen.”
Separately, the Ministry of Economic Affairs on Saturday assured the public that supplies of daily life products are ample, but announced new measures to curb hoarding.
Each customer can only buy up to two items in each of the categories of toilet paper, instant noodles, rice and canned foods, the ministry said.
The ministry on Facebook posted pictures of boxes of instant noodles piled up to the ceiling of a warehouse, saying that there were equally “mountains of supply” of toilet paper and canned foods.
Additional reporting by Kao Shih-ching and agencies
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