TAIPEI (Taiwan News) — Taiwan’s National Financial Stabilization Fund on Monday announced it will end its market-stabilization mission, bringing the longest intervention in the stock market’s history to a close.
The fund entered the market on April 9 last year after the US announced new tariffs, which triggered heightened volatility in global markets and a 2,838-point drop in Taiwan’s stock market in a single session. Its withdrawal marks the conclusion of nearly nine months of intervention, according to The Storm Media.
Established in 2000, the fund is authorized to step in during major domestic or international events that could undermine public confidence or disrupt financial markets. Its mandate is to help stabilize Taiwan’s capital markets during periods of turbulence.
According to the fund’s latest financial report, it invested about NT$12.24 billion (US$386.7 million) during the intervention period, achieving a return of more than 50% excluding dividends. No additional capital was injected in the fourth quarter of last year.
The fund said its measures have helped restore market order and strengthen investor confidence, adding that current conditions no longer meet the criteria outlined in Article 8 of the Act for the Establishment and Administration of the National Financial Stabilization Fund. The article refers to major domestic or international events, large capital flows, or market disruptions that could threaten financial stability.
The announcement prompted some investor concern over potential renewed volatility in Taiwan’s stock market, according to Yahoo Stocks.
Institutional investors, however, noted that Taiwan’s equity market remains in a strong uptrend and that the fund’s exit is unlikely to have a significant impact. They added that the withdrawal does not indicate a reversal in market momentum, according to Business Weekly.
The fund’s exit mechanism is gradual, reducing the risk of concentrated selling pressure. With overall market momentum remaining solid, any effects of the withdrawal are expected to be absorbed through regular trading.
Taishin Securities Investment Advisory Vice President Huang Wen-ching (黃文清) said the scale of the fund’s intervention is small relative to current market activity. Since April, the fund’s investments totaled NT$12.24 billion, compared with daily market turnover that often reaches NT$600-700 billion.
Taishin Securities Investment Advisory Vice Chair Li Chen-yu (李鎮宇) said the fund’s exit is often viewed as a positive signal. Based on eight previous withdrawals, the probability of market gains one month after an exit is about 60%.
Citing examples from 2010 and 2023, Li noted that Taiwan’s stock market rose both one week and one month after the fund exited, suggesting that when underlying fundamentals are strong, the post-exit period can present investment opportunities.
This information is not intended as personalized financial advice. Investors are encouraged to conduct their own research and analysis before making investment decisions.
