The government decided to activate the state-owned National Stabilization Fund (國安基金) yesterday, an overnight change made ahead of the stock market opening, but it refused to reveal details of how the fund would act.
“The economic fundamentals of this country are still stable, but in view of the sharp decline in the US stock market on Sept. 17 and possible volatility in international financial markets … conditions are right for the fund to enter the stock market,” the fund’s management committee said in a statement.
The press release was issued at 10:10am, just over an hour after the TAIEX had opened down 242.82 points from its close on Wednesday, a drop of 4.19 percent. The benchmark index gained as the day progressed, ending 158.92 points down from Wednesday at 5,641.95, a drop of 2.74 percent.
At a press conference following the Cabinet’s weekly meeting yesterday, Minister of Finance Lee Sush-der (李述德) cited the Regulation on the Establishment and Management of the National Stabilization Fund (國家金融安定基金設置及管理條例) to justify the decision to use the fund.
“Paragraph 1 of Article 8 of the regulation authorizes the government to use the National Stabilization Fund when confidence of investors might be shaken by major incidents in the country and abroad, or by significant international capital movement that would result in disorder in the capital and financial markets and could hurt the nation’s stability,” he said.
The decision was made at a meeting of the fund’s management committee yesterday convened by Vice Premier Paul Chiu (邱正雄), the second day in a row the committee has met to discuss the turmoil sparked by the US’ financial woes.
Lee, however, failed to give a clear explanation of why the government decided to activate the fund after the management committee decided on Wednesday that the fund should remain inactive for the moment.
Lee said the committee had made the most appropriate decision based on the economic and financial situation in domestic and overseas markets. But he did not say what specifically had sparked the shift.
“Members of the management committee said that Taiwan’s share prices had dropped below the level they are supposed to have, compared with global stock markets,” Lee said. “An important reason to use the fund was that the impact of international financial incidents on the country is likely to last for some time.”
Lee’s remarks appear to contradict Chiu’s statement on Tuesday, when he said the US financial trouble was expected to end soon as “it usually takes one-and-a-half years to get through an economic downturn,” a reference to the start of the US sub-prime mortgage crisis the summer of last year that triggered the current crisis.
Activating the National Stabilization Fund, which has NT$500 billion in capital, was one of a spate of measures the government has adopted to sustain Taiwan’s stock markets.
Lee refused to discuss details of the fund’s transactions, saying that the fund’s management committee would make the best decision on which shares to buy, the amount and the prices as a general investor.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS