The National Stabilization Fund reported a net profit of NT$8.054 billion (US$253.4 million) as of the end of last month and has no plans to re-enter the market despite the war in the Middle East, the fund’s executive committee said yesterday.
Based on a holding cost of NT$9.963 billion in Taiwanese stocks, the return on investment stood at 80.84 percent, it said.
The NT$500 billion stabilization fund was established in 2000 to cushion the local equity market against unexpected external factors that might disrupt local trading. It ended its last market-support operations on Jan. 12 following its activation in April last year, when US President Donald Trump’s global tariffs rattled investors.
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So far, the fund still holds stocks with a market value of NT$3.56 billion, the executive committee said in a statement. After deducting the cost of holding the stocks worth NT$2.287 billion, the unrealized capital gain is NT$1.273 billion, it said.
The TAIEX yesterday rose 0.11 percent to close at a new high of 35,457.29 points, despite Trump’s threats to blockade the Strait of Hormuz after failing to reach an agreement with Iran over the weekend. Oil prices surged and stock markets across Asia mostly moved lower.
Compared with the Jan. 12 close of 30.567.29 points, the TAIEX had increased 4,890 points, or 16 percent, indicating that the withdrawal of the fund from the market has not had a negative impact on the local equities, the executive committee said.
The US-Israeli war on Iran has led to soaring energy prices, potentially pushing up inflation and dragging down economic growth, creating fluctuations in global equities including Taiwan, but the fund has not sold shares since the war began on Feb. 28, it said.
The fund remains confident in the local stock market, given the government’s measures to ensure sufficient energy supply, stable consumer prices and supply chain operations, while Taiwan’s economic fundamentals remain sound and companies’ performance are still strong, it added.
The committee said it would continue monitoring domestic and international economic and political developments closely and could take action in a timely manner in accordance with regulations.
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