Taiwan shares up 0.32 percent, buoyed by government funds
By Kathryn Chiu, The China Post
March 25, 2014, 12:18 am TWN
TAIPEI, Taiwan -- Despite protests against the trade-in-services agreement with China intensifying, Taiwan shares on Monday closed up 0.32 percent at 8,605.38 on the back of bargain hunting launched by government funds.
Taking a hint from other major regional currency units, including the renminbi, the won and the yen, the Taiwan dollar yesterday ended its losing streak and closed up NT$0.003 at NT$30.622 against the greenback.
The call to scrap the Taiwan-China trade-in-services pact yesterday sent waves through the local stock market.
The Benchmark Taiwan Stock Exchange Weighted Index (TAIEX) yesterday opened down 60 points, testing the 8,500-point mark. Soon afterwards, the four big government funds stepped in to increase holdings of large-cap stocks including Taiwan Semiconductor Manufacturing Company (TSMC, 台積電), Advanced Semiconductor Engineering Group (ASE, 日月光) and Hon Hai Precision Industry (鴻海精密).
"The Big Four" government funds are an array of social security funds that comprise Taiwan's retirement system. They are the Labor Pension Fund (LPF), the Labor Insurance Fund (LIF), the Public Service Pension Fund (PSPF) and the National Pension Insurance Fund (NPIF), and the latter three are usually used by authorities to stabilize the broader market.
With the support of "The Big Four," Taiwan shares closed up 28.21 points, or 0.32 percent, at 8,605.38 Monday on turnover of NT$79.02 billion.
Managers of research departments at foreign brokerages are concerned about the development of the situation but have basically maintained a neutral view on shares in Taiwan. They also said that a sudden plunge in share prices would present the best opportunity to buy in the short term.