Taiwan Stocks Plunge Over 20% in Single Week
Taiwan stocks opened down nearly 3800 points last Friday (November 6), at one point plunging by nearly 3800 points, with an intraday low of 37837 points, the recent lowest point, and closed at 39701 points. Compared with this year's high of 49968 points, the cumulative decline was 10267 points, a drop of 20.55%, exceeding 20%. It has fallen more than 10000 points from the peak, falling 5510 points in a single week, with foreign investors continuing net selling, showing a clear lack of investor confidence. After the National Stabilization Fund resolved to enter the market to stabilize it, Taiwan stocks stopped falling and rebounded this week. This is the 10th market intervention in the history of the National Stabilization Fund.
Extraordinary Meeting Authorizes Stabilization Mission
Finance Minister Chuang Tsui-yun explained that Taiwan stocks opened down nearly 3800 points last Friday, with an intraday low of 37837 points, and finally closed at 39701 points, down 10267 points from the high of 49968 points, a decline of 20.55%. Considering that uncertainty in the international political and economic situation remains high, coupled with the U.S. midterm election results deepening concerns over AI investment, and continued net selling by foreign investors, the National Stabilization Fund Management Committee convened an extraordinary meeting on the afternoon of November 6, and after discussion and by consensus, authorized the executive secretary to use funds as appropriate to carry out market stabilization tasks, in response to insufficient confidence in the capital market.
Intervention Timeline and Exit Mechanism
On how long the National Stabilization Fund will stay in the market and whether any exit threshold was discussed, Chuang Tsui-yun said on the 11th at the Legislative Yuan Finance Committee that the staff of the National Stabilization Fund will closely monitor the state of the stock market and take relevant measures in response to conditions. As for when to exit, consideration must ultimately be given to the overall market situation, and exit operations will only be carried out after discussion by the National Stabilization Fund Committee and formation of a consensus resolution. In response to legislators' concerns about the length of the intervention period, Chuang Tsui-yun reiterated that it will continue to monitor the state of the stock market and respond according to market conditions.
Entry Requirements Initiated According to Law
Regarding outside questions that the National Stabilization Fund's market entry was based on election considerations, Chuang Tsui-yun explained that entry by the National Stabilization Fund to stabilize the market must meet certain conditions. Under Article 8 of the "National Financial Stabilization Fund Establishment and Administration Act," the situation must be one in which "due to domestic or foreign major events or large movements of international funds, public confidence is significantly affected, causing the capital market and other financial markets to be disordered or likely to endanger national stability." She noted that this time, as the U.S. midterm election results deepened concerns over AI investment and market confidence was clearly insufficient, the statutory requirements were met, and the intervention was authorized after a consensus resolution by the committee, and was not based on election factors.