The government yesterday authorized the activation of its NT$500 billion (US$15.15 billion) National Stabilization Fund (NSF) to prop up the local stock market after two days of sharp falls in reaction to US President Donald Trump’s new import tariffs.
The Ministry of Finance said in a statement after the market close that the steering committee of the fund had been given the go-ahead to intervene in the market to bolster Taiwanese shares in a time of crisis.
The fund has been authorized to use its assets “to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan’s stock trading market,” it said.
Photo: CNA
After falling 9.7 percent on Monday, the TAIEX closed down 772.40 points, or 4.02 percent, at 18,459.95 yesterday, hitting its lowest level in 14 months.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, fell 3.77 percent to close at NT$816, and Hon Hai Precision Industry Co (鴻海精密), second to TSMC in terms of market value, fell by the daily maximum for a second day to close at NT$125.
The “international panic atmosphere remains strong,” and foreign investors have continued to sell their holdings since the start of the year, the ministry said.
“This is not conducive to the stability of the Taiwanese shares,” it said.
While the downturn in the TAIEX was capped as some investors appeared willing to buy the dip and turnover on the main board increased to NT$548.951 billion, yesterday’s loss was the eighth-largest daily decline in history, Taiwan Stock Exchange’s data showed.
“Judging from today’s movement, I think some bargain hunters jumped into the trading floor after yesterday’s plunge as the US markets showed signs of stabilizing,” Moore Securities Investment Consulting Co (摩爾投顧) analyst Adam Lin (林漢偉) said.
Lin was referring to the 0.10 percent rebound on after a fall of 5.82 percent on Friday, and a 0.91 percent drop on the Dow Jones Industrial Average, compared with a 5.05 percent plunge a session earlier. That helped major stock markets elsewhere and oil prices recover slightly yesterday after a huge sell-off the previous day.
Tokyo’s stock market closed up more than 6 percent after Japanese Prime Minister Shigeru Ishiba held talks with Trump, while Hong Kong’s stock market closed up by more than 1 percent, having plunged more than 13 percent on Monday, its biggest one-day retreat since 1997.
Trading in Jakarta was briefly suspended after it plunged more than 9 percent in exaggerated moves following a long holiday weekend in Indonesia. At the close, the market fell 7.9 percent to its lowest level since June 2021.
Shanghai advanced 1.6 percent, Sydney and Mumbai added more than 2 percent, while Manila gained 3 percent. Seoul and Wellington also edged up. Europe’s main indices were up by an average of about 1.5 percent approaching the half-way stage.
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS