TAIEX hits 10,000-point high for the first time in 15 years



TAIPEI, Taiwan — The Taiwan Stock Exchange hit the 10,000-point mark yesterday for the first time in 15 years, a breakthrough that the Financial Supervisory Commission (FSC, 金管會) traced to foreign institutional buying.

The benchmark Taiex index exceeded the 10,000-point mark at 9:59 a.m. yesterday before closing up 0.6 percent at 9,973.12 on turnover of NT$130.16 billion.

At a meeting of the Legislative Yuan’s Finance Committee, Kuomintang (KMT) Legislator Lu Shiow-yen (盧秀燕) remarked on the milestone and passed out candies to celebrate.

During interpellation at the meeting of the Finance Committee, FSC Chairman William Tseng (曾銘宗) was asked if the central government intervened in the stock market.

Tseng said the market had been boosted by individual investors but was mainly supported by strong foreign institutional buying.

The FSC and the Central Bank imposed a new restriction last week on foreign investors of Taiwanese corporate bonds and bank debentures, capping holdings at 30 percent of their Taiwanese securities, Tseng said.

TAIEX saw a 300-point advance last Thursday and Friday as overseas investors shifted NT$68.7 billion from bonds to stocks, he continued. The market closed at 9,913 points on Friday, in place to potentially break the 10,000-point mark the week after.

He said the FSC will continue to implement the “ascension plan” (揚升計畫), a package of measures aimed at making Taiwan investment more attractive for offshore funds.

“In my heart I have the stock market, but I do not have my heart set on a specific point-mark milestone,” Tseng said.

Room to Climb

Finance Minister Chang Sheng-ford (張盛和) was upbeat on the TAIEX surge, saying the msrket has more room to climb as it is currently not driven by impassioned retail investors.

“I have experienced that era in which (TAIEX) was above 30,000 points,” Chang told reporters on the sidelines at the Finance Committee.

“At that time, people had gone crazy. The vegetable sellers were buying stocks. The bus drivers at my son’s preschool — all of them had resigned from their jobs to buy stocks,” Chang said

The atmosphere this time is calmer, the Finance Minister said, adding that the difference boosts the likelihood of TAIEX continuing to rise.

“When all of the people are jumping in (the stock market), that means the market froth is about to dissipate,” he said.


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