Taiwan stabilization fund nets 81% return from latest market intervention

Taipei, July 14 (CNA) Taiwan's National Financial Stabilization Fund earned a return of 81 percent on stocks it purchased during its latest market intervention from April 9, 2025 to Jan. 12, 2026, according to the Ministry of Finance (MOF).

The financial results were released by the management committee of the stabilization fund, which was set up to ease market volatility, after it wrapped up a regular quarterly meeting on Monday, the MOF said.

The committee said the stabilization fund invested NT$$12.25 billion (US$380 million) to buy shares during the longest market intervention of 279 days in history and completed disposal of the stocks on May 6, raking in NT$9.932 billion in net profit, which translated into a return rate of 81 percent.

According to the committee, the stabilization fund generated NT$9.86 billion in profit from the stock disposal and received NT$198 million in cash dividends issued by the stocks it bought.

After excluding interest payments for margin trading and other costs, the net profit reached NT$9.932 billion.

The stabilization fund jumped into the market in April 2025 as the local bourse suffered heavy losses after U.S. President Donald Trump announced "reciprocal tariffs."

During the 279-day market intervention, the Taiex, the Taiwan Stock Exchange's benchmark index, soared 13,175.53 points, or 75.76 percent.

After the stabilization fund withdrew from the market, it started to dispose of the stocks from Jan. 13, and the disposal was completed on May 6.

From Jan. 13 to May 6, after the stabilization fund's withdrawal from the market, the Taiex rose an additional 10,571.56 points, or 34.58 percent, indicating the disposal did not impose any adverse impact, as share prices were still in an uptrend, the committee said.

An official from the committee told CNA that the latest market intervention proceeded very smoothly as Taiwan enjoyed sound economic fundamentals during the current AI boom, helping it brave the headwinds created by the U.S. tariff policies.

The official admitted that in the initial stage of the intervention, the local stock market had been affected by a panic-led mood, but with the presence of the stabilization fund, its sentiment had turned stable.

The committee said local stocks still faced uncertainties from geopolitical unease and international trade policies, so the stabilization fund will continue to watch the market conditions and come up with stabilizing measures, if necessary.

The NT$500 billion stabilization fund was set up in 2000 by the government to serve as a buffer against unexpected external factors that might disrupt the local bourse.

The fund has previously been used to support the stock market in 2000 (twice), 2004, 2008, 2011, 2015, 2020 and 2022.

The stabilization fund's largest intervention by volume was in October 2000, when it entered the market by spending NT$120 billion in stock purchases amid fears over the dotcom bubble, spiking oil prices, and the suspension of construction on Taiwan's No. 4 nuclear plant.