Eq­uity dive costs each in­vestor NT$200,000 in losses in Au­gust: sta­tis­tics

The China Post - - LOCAL -

A plunge on the lo­cal eq­uity mar­ket in re­cent ses­sions posted mas­sive losses for in­vestors, mar­ket sta­tis­tics showed . Ac­cord­ing to the data, eq­uity in­vestors in Tai­wan have lost more than NT$200,000 on av­er­age so far this month.

The lo­cal eq­uity mar­ket started a down­trend since late April and its down­turn ac­cel­er­ated in Au­gust. So far this month, the weighted in­dex of the Tai­wan Stock Ex­change fell more than 800 points or about 10 per­cent from a month ear­lier. That trans­lated into a loss of more than NT$200,000 shoul­dered by each in­vestor on av­er­age.

On Fri­day, the weighted in­dex on the Tai­wan Stock Ex­change closed down 3.02 per­cent at the day’s low of 7,786.92 amid tur­moil in the global eq­uity mar­kets stoked by con­cerns over weak­en­ing de­mand in the world. The losses sent the weighted in­dex to a level be­low the 10-year mov­ing av­er­age of 7,789 points, paving the path for fur­ther down­turns, deal­ers said.

The lo­cal main board briefly breached 10,000 points in the April 28 ses­sion but started to trend lower due to con­cerns over the debt prob­lems in the eu­ro­zone and fears over an in­ter­est rate hike cy­cle to be kicked off by the U.S. Fed­eral Re­serve later in the year.

Selling con­tin­ued into the fol­low­ing months, with a pre­cip­i­tous de­cline in Au­gust, when in­vestors were caught off guard by a move by the gov­ern­ment to trim its forecast of Tai­wan’s 2015 eco­nomic growth to 1.56 per­cent from 3.28 per­cent.

Weighted In­dex Lost 2,000

Points Since Last Month

Since late April, the weighted in­dex has lost more than 2,000 points or about 22 per­cent. The sell-off cost each of the 9.43 mil­lion in­vestors in the lo­cal eq­uity mar­ket about NT$660,000 on av­er­age in less than four months.

In Au­gust, large-cap stocks, such as Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC, , and Fubon Fi­nan­cial Hold­ing Co. (

suf­fered steep declines, to send the weighted in­dex into a tail­spin, which has eroded in­vestors’ con­fi­dence and badly hurt mar­ket sen­ti­ment.

So far this month, TSMC, the most heav­ily weighted stock in the lo­cal mar­ket, has fallen 13.3 per­cent, while Fubon Fi­nan­cial has even shed 13.5 per­cent.

Amid con­cerns over fur­ther vol- atil­ity in the global mar­ket caused by an eco­nomic slow­down, many re­tail in­vestors have feared that the lo­cal eq­uity mar­ket will fall fur­ther down the road and they will suf­fer more losses.

Na­tional Sta­bi­liza­tion Fund

Due to these con­cerns, re­tail in­vestors have urged the Na­tional Sta­bi­liza­tion Fund to en­ter the mar­ket in a bid to pre­vent the in­dex from fur­ther losses. The Na­tional Sta­bi­liza­tion Fund is a mech­a­nism set up by the gov­ern­ment to serve as a buf­fer against non eco­nomic fac­tors that may cause dis­rup­tion of the lo­cal bourse.

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