Shares rally on back of stabilization fund
Shares end up at 7,715 points after fund hits equity market
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.