The National Stabilization Fund (NSF) will continue to support local shares in spite of the TAIEX’s recent rebound, as global trade headwinds could attenuate Taiwan’s GDP growth, despite a strong first-quarter performance, two government ministers said yesterday.
“The fund will remain active in the stock market at least through July, as the government aims to boost investor confidence in the face of global economic uncertainty,” Minister of Finance Chuang Tsui-yun (莊翠雲) told a meeting of the legislature’s Finance Committee in Taipei.
The minister attributed the TAIEX’s recent rally to the agreement over the weekend between the US and China to slash their respective tariffs for 90 days, allowing the world to breathe a sigh of relief.
Photo: CNA
The agreement suggests that global economic and geopolitical uncertainties persist, Chuang said.
The TAIEX gained 5 percent over the past five sessions to close above the 21,000-point mark, Taiwan Stock Exchange data showed. The benchmark index slid 0.24 percent to close at 21,730.25 yesterday.
“The fund will not exit before its next quarterly meeting in July... Rather, it will continue to carry out its duty of stabilizing market confidence,” Chuang said.
The government on April 8 activated the NT$500 billion (US$16.56 billion) fund in a bid to shore up the local bourse, which tumbled to 17,391 amid panic sell-offs triggered by US President Donald Trump’s announcement on April 2 to slap a 32 percent “reciprocal” tariff on Taiwanese goods.
Chuang declined to remark on the fund’s operations, saying that a committee is in charge of the fund’s trading decisions and she is not involved.
The committee’s executive secretary — Deputy Minister of Finance Frank Juan (阮清華) — is tasked with managing the fund to support the local market and shore up investor confidence.
The fund has intervened during major crises, including the political power transition in 2000, the global financial crisis in 2008, the COVID-19 pandemic in 2020 and the outbreak of the Russia-Ukraine war in 2022.
The fund’s next scheduled meeting is in July, when the committee is to evaluate whether it would stay in the market, Chuang said.
Minister of the Directorate-General of Budget, Accounting and Statistics (DGBAS) Chen Shu-tzu (陳淑姿) shared the cautious tone, saying Taiwan would have difficulty achieving GDP growth of more than 3 percent this year, despite a 5.37 percent expansion in the first quarter.
Taiwan delivered a stronger-than-expected performance in the first quarter on the back of front-loading demand, but concerns over US tariffs are clouding the outlook for the rest of the year, she said.
The momentum is unlikely to be sustained in the second half of this year — the high season for technology products — although front-loading demand has continued this quarter, Chen said.
With risks of tariffs from the US hanging over Taiwan’s export-reliant economy, achieving 3 percent growth is difficult this year, she said.
Trump has threatened to impose tariffs of up to 100 percent on semiconductors. The DGBAS is to release its GDP growth update on May 28.
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