Taipei, The commission in charge of the National Stabilization Fund decided on Monday to pull the fund out of Taiwan’s stock market as local share prices have rebounded from their lows in March when they were brought down by COVID-19 fears.
The commission said in a statement it made the decision at its quarterly meeting on Monday because the Taiwan Stock Exchange’s benchmark weighted index, the Taiex, has made a strong comeback from its March lows to nearly reach the 13,000-point mark.
During the fund’s presence in the stock market, the Taiex has risen 4,274.57 points, or 49.24 percent, from the low of 8,681.34 seen on March 19 to close at 12,955.91 on Monday.
The fund was authorized by the commission on March 19 to step in as Taiwan’s stock market came under heavy downward pressure amid escalating fears over COVID-19, which was sending ripples through the global economy.
The commission said Monday Taiwan has done well in fighting COVID-19, and the local economy appears resilient and has gradually recovered to outperform many other countries in the world, giving it confidence that intervention is no longer necessary.
Although political and economic uncertainty still exists, liquidity remains strong as major central banks have eased their monetary policies, a trend that is expected to continue to support the world economy and global stock markets, the commission said.
The NT$500 billion (US$17.24 billion) stabilization fund was set up in 2000 by the government to serve as a buffer against unexpected external factors disrupting the stock market.
Despite the decision, the commission said the fund will continue to watch for possible volatility in local stock prices, and if necessary, it will authorize the fund to re-enter the market.
Source: Focus Taiwan News Channel