Following the closure of its intervention in the local stock market in mid-April, Taiwan’s National Financial Stabilization Fund reported that it had pocketed more than NT$6 billion (US$186 billion) in profit from its investments as of the end of last month, the Ministry of Finance (MOF) said yesterday.
The stabilization fund, which aims to mitigate market volatility, released the updated financial results in a fund committee meeting held earlier yesterday.
The committee said it had sold about 60 percent of the stocks bought during the intervention period that started on July 13 last year and ended on April 13 this year, and had posted a total of NT$5.33 billion in gains and received about NT$1.35 billion in cash dividends from its investments.
Photo: CNA
Net income as of the end of last month stood at NT$6.18 billion with a return rate of 19.63 percent, according to the ministry.
That intervention, the eighth ever, marked the stabilization fund’s longest market presence, a total of 275 days, including 181 trading sessions.
The intervention came after the TAIEX dipped below 14,000 points on July 12 last year amid escalating fears over rising interest rates in the US which were sending global financial markets into a tailspin.
During the intervention, the stabilization fund injected about NT$54.51 billion into the market to bolster share prices, the third-highest injection ever by the fund, the ministry said.
During that time, the TAIEX rose 13.29 percent, outperforming many foreign counterparts, it said.
Since the withdrawal from the local stock market, the TAIEX has risen 867.27 points, or 5.49 percent, ending at 16,672.03 yesterday, indicating that local shares have stayed stable despite the stabilization fund not currently intervening, the ministry said.
With Taiwan’s exports returning to a growth pattern last month, solid domestic demand and government measures to encourage investment, the local stock market is expected to stay stable, it said.
However, the ministry warned of the potential negative impacts of geopolitical risks and high inflation in the global markets, saying that the stabilization fund would continue to monitor the stock market closely and would make a prompt response if necessary.
The government set up the NT$500 billion stabilization fund in 2000 to serve as a buffer against unexpected external factors that might disrupt the local bourse.
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