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.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS