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Taiwan stocks' lower limit restored to 7%

Taiwan stocks' lower limit restored to 7%

The maximum allowed fall in share prices on Taiwan's stock exchange will be restored to the standard 7 percent limit Monday after being halved to 3.5 percent since Oct. 13, the Financial Supervisory Commission said Sunday.
The commission said it felt the revised cap on the lower limit was no longer needed because downward spirals in international markets have eased.
The commission also noted that its ban on short selling of stocks will remain in place until the end of this year to prevent speculative sales of stocks from leading to further plunges in share prices.
Restrictions on loans on securities will be eased, however, to give investors who need to sell their stocks to raise cash easier access to credit, the commission said.
The announcement came amid reports that the 3.5 percent cap had seriously curbed stock market liquidity as investors were reluctant to buy shares before they had fallen to what were considered attractive prices.
Turnover averaged a drop of nearly 20 percent during the past two weeks while the measure was in place.
The commission said the local bourse declined by 7.68 percent last week, lower than the more than 10 percent losses suffered in Japan, South Korea, Hong Kong and Singapore, but will still larger than the 3 percent to 5 percent declines seen in markets in the United States, Britain, Canada, Australia and China.
Contending that the measure had achieved its goal of mitigating the impact of the financial meltdown that began with the subprime mortgage crisis in the United States, the commission said it had decided to do away with it given that the financial situation has turned the corner.


Updated : 2021-04-17 16:22 GMT+08:00