After the National Financial Stabilization Fund announced its entry to support the stock market on July 12, the Taiwan stock's performance morale boosted greatly on July 13, opening back at the 14,000 point mark, up 244 points. At one point, it went up to 14,386, up over 400 points, though amidst substantial long and short battles. Nevertheless, people are skeptical as to the timing of the Fund's entry. Deputy finance minister, also serving as the National Financial Stabilization Fund's Executive Secretary, Juan Ching-hwa, explained the reasons for the fund's entry.
Taiwan stock opened back up at over 14,000 points, all because on the night of July 12, the Ministry of Finance made an official statement that the National Financial Stabilization Fund would enter to support the stock market. Encouraged by the news, on July 13 Taiwan stock shot up to 14,194 at the opening, up 244 points. At 10:30 a.m., it went up to 14,386, up by 436 points.
Li Fang-kuo, Chairperson, President Securities Corporation: “The National Financial Stabilization Fund basically not only provided confidence but also bullets. So Taiwan stock dropping further is quite limited, and this market should gradually rise.”
Taiwan Semiconductor Manufacturing Co.'s weighted stock price immediately went back in the red. TSMC opened up NT$470. During the day, the stock price continued to rise, at one point up over NT$472, increasing by NT$23. Electronics and financial stocks continue to push up Taiwan stock. When asked whether the timing for the National Financial Stabilization Fund to enter was too early, Juan Ching-hwa, Deputy Minister of the Ministry of Finance, also the Executive Secretary of the National Financial Stabilization Fund, emphasized that Taiwan stock has already dropped 3,393 points in the first half of the year, resulting in a 23 percent drop range. In addition, up to now, foreign investments have already sold over NT$900 billion, whereas the Taiwan stock market value has evaporated NT$10.1 trillion. In July alone Taiwan stock dropped over 300 points and in three days, the market is immersed in a panic-selling atmosphere. Thus this is the perfect timing for the National Financial Stabilization Fund to enter the market.
Juan Ching-hwa, Executive Secretary, National Financial Stabilization Fund: “Yesterday (July 12) was a panic market, with a dropping range higher than nearby countries and shrinking volume. The panic atmosphere is accumulating already so if we do not handle it now it will be even more difficult to deal with later.”
Juan emphasized that he will continue to observe the index changes, especially trading volume. If the market continues to drop and shrink, the NT$500 billion funds will enter to support the market and prevent Taiwan stock from further plummeting.