The National Stabilization Fund sold its holdings in local shares by Christmas with accumulated realized gains of NT$11.3 billion (US$363 million), suggesting a 21 percent return, the Ministry of Finance said on Thursday.
The impressive showing put an end to the fund’s latest round of its mission to shore up the local bourse between July 13, 2022, and April 13 last year, during which time the TAIEX took a hard hit from fast capital outflows induced by sharp global inflation and monetary tightening. The benchmark fell 23.43 percent to 13,950.2 points prior to its intervention on July 12, 2022, down from 18,218.84 in late December 2021, the ministry said.
The TAIEX has gained 13.29 percent, or 1,854.14 points, since April 13 last year when the fund announced its departure, the ministry said.
Photo: CNA
The gains included cash dividends of NT$1.38 billion, the ministry said, but did not provide any further breakdown of its purchased stocks returns.
The fund committee said it poured about NT$54.51 billion into the market during the nine-month period to counter volatility from the US Federal Reserve’s aggressive rate hikes that pushed its federal funds rate from zero in early 2022 to 5.25 percent by July last year.
The market staged an uneven rebound, helped by a rapid boom in artificial intelligence equipment and solutions that benefited local tech shares and prompted the fund to ditch interference.
The fund exited in a gradual and quiet fashion to avoid impacting investors’ confidence, the committee said.
Investment interest in local shares showed a solid gain in November last year and last month after the US Federal Reserve conveyed dovish messages that interest rate hikes have approached an end, and that it would consider lowering interest rates this year.
The local bourse emerged unharmed when the fund offloaded its shares, the ministry said, adding that the TAIEX picked up 11.39 percent, or 1,800.08 points.
Although the TAIEX has performed well in the past eight months to rebound to the 17,000-point level, the committee said it would watch how domestic and foreign markets perform and react promptly to any volatility.
Additional reporting by CNA
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