Vol­ume up 14% since new trad­ing range: FSC

The China Post - - TAIWAN BUSINESS - BY ENRU LIN

Trad­ing vol­ume on the bench­mark TAIEX rose by 14 per­cent in the first five ses­sions of its new fluc­tu­a­tion range, the Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC,

) said yes­ter­day. Last Mon­day, mar­ket reg­u­la­tory au­thor­i­ties widened the trad­ing band from 7 per­cent to 10 per­cent.

The TAIEX took a bat­ter­ing in the first five trad­ing days of the new mea­sure, end­ing down 360.94 points, or 3.72 per­cent, to close at 9,340.13 on Fri­day.

Asked for his re­ac­tion to the mar­ket dive, FSC Chair­man Wil­liam Tseng (

) said yes­ter­day that the swing is due mainly to Greece’s un­re­solved debt cri­sis and other sources of fi­nan­cial volatil­ity over­seas.

Tseng said 10-per­cent trad­ing range has am­pli­fied vol­ume by about 14 per­cent, and “when there is an ef­fect on vol­ume, there is an ef­fect on price.” Av­er­age daily trad­ing vol­ume swelled from NT$ 121.5 bil­lion in May to NT$138 bil­lion in the first five trad­ing days of June, Tseng said at the Leg­isla­tive Yuan.

Mar­ket Dive Due to Global Volatil­ity:

FSC chair­man

Tseng stressed yes­ter­day that last week’s mar­ket un­der­per­for­mance was un­re­lated to the widened trad­ing range.

Dur­ing a meet­ing of the Leg­isla­tive Yuan’s Fi­nance Com­mit­tee ( ), he at­trib­uted the dive to over­selling by for­eign in­sti­tu­tional in­vestors, caused by vari­ables in­clud­ing Greece’s de­ci­sion to de­lay a debt pay­ment to the In­ter­na­tional Mon­e­tary Fund (IMF).

Within six trad­ing days, for­eign in­vestors have sold off NT$37.4 bil­lion worth of shares, af­fect­ing TAIEX while sparing the GRETAI Se­cu­ri­ties Mar­ket (GTSM,

), which is dom­i­nated by do­mes­tic in­vestors, he said.

The GTSM saw only a mild 5.6-point fall, which in­di­cates that the TAIEX show­ing was likely shaped by for­eign in­vestors and not do­mes­tic ones re­act­ing to new reg­u­la­tory mea­sures, he said. The FSC chair­man said that de­spite the sell­ing spree, for­eign play­ers have re­tained NT$204.3 bil­lion of funds in the lo­cal bourse and may in­crease in­vest­ment when global vari­ables sta­bi­lize.

He said yes­ter­day there is a “high like­li­hood” that main­land Chi­nese stocks are about to se­cure in­clu­sion in the global mar­kets in­dex MSCI, and that Tai­wan must make bolder mar­ket re­forms to main­tain com­pet­i­tive­ness.

30% Flux Cap

The FSC’s goal is to grad­u­ally ex­pand the stock price fluc­tu­a­tion cap to 30 per­cent, he said.

Dur­ing in­ter­pel­la­tion with Kuom­intang (KMT) Leg­is­la­tor Lai Shyh-bao ( ), Tseng said that the for­mer 7-per­cent cap had cre­ated the equiv­a­lent of a “kid­die pool,” while lift­ing it to 10 per­cent had up­graded the mar­ket to a “youth pond.”

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