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FSC chair urges investors to stay calm after bourse plunges

FSC chair urges investors to stay calm after bourse plunges

Taipei, May 23 (CNA) Chen Yuh-chang, chairman of the Financial Supervisory Commission (FSC), urged investors Thursday to stay calm after the local bourse took a dive, sending the index below 8,300 points at the end of the trading session. Chen said the local economic fundamentals remain sound and the one-day drop in the stock market is unlikely to have any adverse effects on the economic situation. The weighted index closed down 1.91 percent at 8,237.83 points, the lowest level since May 7, when it stood at 8,163.06 points. The FSC, the top financial watchdog in Taiwan, runs the Securities and Futures Bureau that monitors the local stock market. Chen attributed the steep decline to negative external factors, referring to lingering concerns over a possible end soon to the United States Federal Reserve's stimulus measures. Fed Chairman Ben Bernanke told U.S. lawmakers overnight that a premature withdrawal from the stimulus measures could hurt the country's economic recovery, but members of the Fed said they were willing to scale down the bond-buying program as soon as June if the economic recovery is sustainable. Chen said the mixed messages from the Fed have raised fears that the U.S. will scale back its quantitative easing measures earlier than expected. He said the local bourse understandably reacted negatively to such concerns, but he urged investors not to worry about the fluctuations in a single session. Chen made the comments during a meeting of the Legislature's financial sub-committee, taking questions from lawmakers about the volatility of the local stock market. Democratic Progressive Party lawmaker Hsu Tain-tsair said he was worried about speculative buying in select small and mid-cap stocks on the over-the-counter (OTC) market in recent sessions since these companies have report losses for several consecutive quarters. In response, Chen said the GreTai Securities Market, which operates the OTC market, already has a mechanism in place to monitor market fluctuations. The exchange will request small and mid-cap stocks to restate their financial results, if necessary, to improve information disclosure, he said. Investors can still choose blue chips with healthy fundamentals from the local bourse, he added. (By Wu Ching-chun and Frances Huang)


Updated : 2020-11-30 21:22 GMT+08:00