The Financial Supervisory Commission (FSC) does not plan to end its ban on short-selling local stocks, despite a recent TAIEX rebound, as US monetary policy remains on a tightening trajectory, FSC chair Thomas Huang said.
The commission is to continue monitoring how global financial markets fare and how foreign regulators set their monetary policies, at least until the US Federal Reserve’s next rate hike, Huang said.
The FSC needs to observe market trends for a while longer before deciding whether to end the short-selling ban, he said:
“Whether the TAIEX has surpassed a specific level, such as 14,000 points, is not the deciding factor. We care more about is whether local stocks have truly stabilized.”
Meanwhile, the government’s NT$500 billion (US$16.07 billion) National Stabilization Fund is to continue lending support to local equities, Minister of Finance Su Jain-rong told the same meeting.
Four issues would be deciding factors regarding when the fund should be withdrawn: the Fed’s pace of rate hikes, trade tensions between the US and China, the war in Ukraine and China’s strict COVID-19 prevention measures, Su said.