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Vice premier declines to grade fund performance

Vice premier declines to grade fund performance

Taipei, Jan. 7 (CNA) Vice Premier Sean Chen Saturday declined to grade the performance of the National Stabilization Fund, which started its intervention in the local bourse in late December. However, he reiterated that the NT$500 billion (US$16.53 billion) fund, which is designed to protect the local stock market from volatility caused by unusual external and internal negative leads, such as the current debt crisis in the eurozone, aims to help restore investors' confidence. Chen made the remarks when asked by reporters to give a score on the performance of the fund after the Cabinet announced Dec. 20 the fund was ready to buy stocks to shore up local share prices. The vice premier said it was unnecessary to grade the performance, but he was sure that the fund was working to maintain market order amid the interruptions created by the European debt crisis. Since August 2011, Chen said, global financial markets have been hard hit by the European debt fears and many bourses in the U.S., Europe and Asia have witnessed their trading volumes shrinking by as much as 40 percent with many investors taking to the sidelines. In 2011, the local bourse even fell about 21 percent from a year earlier with market sentiment having seriously dampened. However, Chen said after the presence of the stabilization fund, daily turnover of the local bourse has expanded to some extent, indicating many investors have become more willing to trade.
On Friday, turnover expanded to NT$88.10 billion from Monday's NT$50.47 billion, which was the lowest since Jan. 20, 2009. According to the Taiwan Stock Exchange, the average price to earnings (PE) ratio on the local bourse stood at 15.76 at the end of 2011, up from 15.29 at the end of November. Market analysts said the rise in the PE multiple reflected a 2.43 percent gain in share prices in the month due to the stabilization fund's intervention. Chen said investors had better be aware that any investment carries risks and it is irrational to ask the stabilization fund to guarantee they can make a profit.
He added the establishment of the fund is for the benefit of the 23 million people on the island, not simply for the good of stock market investors. (By Huang Chiao-wen and Frances Huang)


Updated : 2021-06-16 10:36 GMT+08:00