Taiwan Stocks Fall Below 40,000 Points, Triggering 10th Rescue
After the U.S. midterm elections, market doubts over AI investment deepened, with U.S. stocks and major Asian stock markets plunging in tandem. Taiwan stocks cumulatively fell 5510 points from November 2 to 6 this week, opened nearly 3800 points lower today, hit an intraday low of 37837 points, and closed at 39701 points. The weekly decline was 12.19%, second only to the Philadelphia Semiconductor Index's 15.7% decline. Taiwan stocks have fallen 10267 points from this year's high of 49968 points, a decline of 20.55%, with continued net selling by foreign investors, showing clearly insufficient investor confidence. The National Stabilization Fund today announced the launch of market stabilization, with 5000億元 in funds officially loaded, marking its 10th market entry since its establishment in 2000.
Structure of the 5000億元 and Entry Threshold
The full name of the National Stabilization Fund is the National Financial Stabilization Fund, established by the government in 2000 to respond to major domestic and foreign events, maintain stability in capital markets and other financial markets, and ensure national security. Available funds Dah Hsin reach NT$5000億元, of which 2000億元 is borrowed from financial institutions using government-held shares in state-owned and private enterprises such as TSMC and Chunghwa Telecom as collateral, and the other 3000億元 comes from postal savings, postal life insurance reserves, labor insurance funds, labor pension funds, and civil servant retirement and survivor relief funds. The competent authority is the Executive Yuan, and the chairman is concurrently held by the Vice Premier of the Executive Yuan. Under the Organic Act for its establishment and administration, when domestic or foreign major events or large movements of international capital significantly affect public confidence, causing market disorder or risking harm to national stability, a committee resolution is required to launch the market stabilization mission. This time, considering that uncertainty in the international political and economic situation remains high, it was resolved to authorize the executive secretary to deploy funds as conditions warrant.
Past Interventions Ranged From 5 Days to 279 Days
In the past, the National Stabilization Fund entered the market 9 times, with the shortest intervention lasting 5 days and the longest 279 days, the largest amount invested was over 1200億元 in October 2000, and the smallest was only 7.57億元 on March 20, 2020 during the COVID-19 pandemic. The 1st time was on March 16, 2000, on the eve of the first party rotation, at 8640.03 points, exiting after 5 days of support, rising 11.3% 1 month later. The 2nd time was on October 3, 2000 amid the dot-com bubble burst, Israeli-Palestinian conflict and the Fourth Nuclear Power Plant construction halt, at 6024.07 points, falling 7.9% 1 month after support, exiting after 43 days. The 3rd time was on May 20, 2004 after the 319 shooting incident, at 5860.58 points on the previous trading day, exiting after 12 days of support, rising 6.6% 1 month later. The 4th time was on September 19, 2008 during the global financial crisis, at 5800.87 points on the previous trading day, falling 12.6% 1 month after support, exiting after 90 days. The 5th time was on December 21, 2011 amid the European debt crisis and the death of North Korea's Kim Jong-il, at 6662.64 points on the eve, rising 3.8% 1 month after support, exiting after 120 days. The 6th time was on August 25, 2015 during the global stock market crash, at 7410.34 points on the previous trading day, rising 9% 1 month after support, staying in the market for 232 days before exiting.
Last Three Interventions Extended Beyond 200 Days
The 7th time was on March 20, 2020 when COVID-19 broke out, when Taiwan stocks had fallen from a January high of 12179 points to 8681.34 points the previous day on March 19, with support lasting 207 days until October 12, rising 20.66% 1 month after support. The 8th time was on July 13, 2022, affected by the Russia-Ukraine war and inflation, falling from 18218.84 points at the end of 2021 to 13950.62 points the day before entry, a cumulative drop of 4268.22 points or 23.43%, staying in the market for 275 days until exiting on April 13, 2023, rising to 15804.76 points, a cumulative gain of 1854.14 points or 13.29%. The 9th time was on April 8 last year, when the United States announced reciprocal tariff policy, falling 2065.87 points on April 7, down 9.7%, setting the largest single-day drop and points decline in history, followed by another 772.4-point drop on April 8, down 4.02%, with support lasting until exit on January 12 this year, a record-long 279 days, the weighted index rising to 30567.29 points, a cumulative gain of 12107.34 points or 65.59%, and all holdings sold off on May 6 this year, with a net profit of 99.32億元 and a return of about 81.08%.