The Financial Supervisory Commission does not plan to end its ban on short-selling local stocks, despite a recent TAIEX rebound, as US monetary policy remains on a tightening trajectory, comission Chairman Thomas Huang (黃天牧) said yesterday.
“It has not been one month since the short-selling ban was implemented. Now is not the time to remove it, ” Huang told a meeting of the legislature’s Finance Committee in Taipei.
The commission is to continue monitoring how global financial markets fare and how foreign regulators set their monetary policies, at least until the US Federal Reserve’s next rate hike, Huang said.
Photo: Chu Pei-hsiung, Taipei Times
US stocks rallied last week after the latest US inflation reading showed an increase last month that was slower than expected.
The rally was the result of investor relief about inflation, but does not foretell a change in US monetary policy, Huang said.
The TAIEX closed above 14,000 points on Friday and continued advancing yesterday, which Huang said reflected investors’ confidence in Wall Street along with an improved outlook for certain local industries.
However, the commission needs to observe market trends for a while longer before deciding whether to end the short-selling ban, he said.
“Whether the TAIEX has surpassed a specific level, such as 14,000 points, is not the deciding factor. We care more about is whether local stocks have truly stabilized,” Huang said.
When the commission implemented similar measures in previous years to stabilize local stocks, it lifted the controls only when local stocks had stabilized over a longer period, he said.
Meanwhile, the government’s NT$500 billion (US$16.07 billion) National Stabilization Fund is to continue lending support to local equities, Minister of Finance Su Jain-rong (蘇建榮) told the same meeting yesterday.
Four issues would be deciding factors regarding when the fund should be withdrawn: the Fed’s pace of rate hikes, trade tensions between the US and China, the war in Ukraine and China’s strict COVID-19 prevention measures, Su said.
The ministry is to discuss whether the fund should exit the market at its next quarterly meeting, he said.
The National Stabilization Fund has been supporting local stocks since July 13, the eighth time it entered into the market, ministry data showed.
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