Traders will from today be barred from short-selling 152 stocks after the Financial Supervisory Commission on Friday said it would tighten a short-selling ban.
The commission said it would keep a close eye on the local stock markets today and see whether investors’ confidence has been restored, the Central News Agency reported yesterday, citing an unnamed commission official.
Taiwanese shares are expected to find some respite this week after US stocks moved higher on Friday as investors priced in comments by US Federal Reserve officials that the central bank might slow the pace of rate hikes in December, equity strategists said.
Photo: CNA
The TAIEX dropped 126.9 points, or 0.98 percent, to close at 12,819.2 on Friday, posting a weekly decline of 2.35 percent, from 13,128.12 on Oct. 14, Taiwan Stock Exchange data showed.
Data compiled by the Securities and Futures Bureau showed that 105 stocks on the Taiwan Stock Exchange and 47 stocks on the Taipei Exchange dropped 3.5 percent or more on Friday, which makes them subject to the regulator’s expanded short-selling ban when the local markets open today.
The commission said in a statement on Friday that investors would not be able to short-sell stocks at a price lower than the previous close if shares drop more than 3.5 percent the previous session, effective immediately.
Securities houses and futures traders that conduct short sales for hedging purposes would not be covered by the latest ban, the commission said.
The local equities have fluctuated significantly in the past few weeks, affected by the volatility of US bond yields and US stocks, Allianz Global Investors Taiwan Ltd (安聯投信) said in a note.
As the outlook for corporate earnings remains mixed and mainstream stocks on the local markets apparently lost momentum, investors are advised to be cautious about Taiwanese equities in the near term, Allianz Taiwan’s equity research team said.
At present, investors might favor stocks that have stable cash flows and strong business fundamentals, or switch to stocks that have relatively lower valuation and growth potential, Allianz said.
In addition, counter-cyclical stocks and those that might benefit from post-COVID-19 pandemic pent-up demand might also gain momentum, it added.
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