Shares rally on back of sta­bi­liza­tion fund

Shares end up at 7,715 points af­ter fund hits eq­uity mar­ket

The China Post - - FRONT PAGE - BY ENRU LIN

Tai­wan shares ral­lied yesterday in a ses­sion that was sup­ported by Na­tional Sta­bi­liza­tion Fund (

), ac­cord­ing to the Fi­nance Min­istry. The Min­istry of Fi­nance (MOF,

) said that the NT$500 bil­lion res­cue fund would en­ter the eq­uity mar­ket on Wed­nes­day.

Wu Tang-chieh ( ), vice fi­nance min­is­ter and ex­ec­u­tive sec­re­tary of the Na­tional Sta­bi­liza­tion Fund Com­mit­tee, said the Cab­i­net on Tues­day had given the fund the green light to act.

“The fund en­ters to­day,” he said Wed­nes­day morn­ing.

Wu, who has dis­cre­tionary power over the fund, did not spec­ify the stocks tar­geted by the fund or the to­tal value of the day’s pur­chases.

These de­ci­sions are based on pro­fes­sional assess­ments, he said, de­clin­ing to com­ment fur­ther.

The emer­gency fund is au­tho­rized to make in­vest­ments to sta­bi­lize share prices in ac­cor­dance with the Reg­u­la­tion on the Es­tab­lish­ment and Man­age­ment of the Na­tional Sta­bi­liza­tion Fund (

). The Cab­i­net had au­tho­rized the state-run fund to take ac­tion, af­ter the main TAIEX in­dex posted its steep­est de­cline in a sin­gle day on Mon­day.

Fi­nan­cial Stocks Likely Can­di­date

Tai­wan shares yesterday closed up 39.95 points, or 0.52 per­cent, at 7,715.59 on turnover of NT$109.29 bil­lion.

TAIEX had opened down 0.55 per­cent but be­gan to re­bound around 11 a.m., led by CTBC Fi­nan­cial Hold­ing Co. ( ) and other fi­nan­cial stocks.

Even as the high-tech sec­tor slid, the fi­nan­cial sub-in­dex gained and closed up 2.37 per­cent: Fubon Fi­nan­cial Hold­ing Co. ( ) climbed 2.89 per­cent to fin­ish at NT$53.40 and Cathay Fi­nan­cial Hold­ing Co. ( ) ended up 3.24 per­cent at NT$44.60.

The rise in fi­nan­cial stocks is most likely a re­flec­tion of gov­ern­ment in­ter­ven­tion via the sta­bi­liza­tion fund, a dealer told the United Evening News.

Firms De­clare Buy-back Plans

Mean­while, listed firms are sup­port­ing the mar­ket with share buy­backs.

On Tues­day, the Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC,

) urged com­pa­nies on the main board to pur­chase trea­sury shares — their own shares on the open mar­ket that are stored and not can­celed — in or­der to re­duce price volatil­ity.

Ge­n­e­sis Pho­ton­ics and Ad­vanced Op­to­elec­tronic Tech­nol­ogy, among oth­ers, have de­clared buy-back plans; Smart­phone ven­dor HTC Corp. said Mon­day that it plans to re­pur­chase up to 6 per­cent of its shares on the open mar­ket over the next two months.

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