Taiwan's regulator tries to stabilise stock market
TAIPEI, Sept 24 (Reuters) - Taiwan's top financial regulator said on Wednesday that the island's National Stabilisation Fund would buy shares below their previous closing prices, in an effort to prop up the battered stock market .
Gorden Chen, chairman of the Financial Supervision Commission, reiterated the fund would step in the market to help bolster investor confidence after huge swings in the main TAIEX index over the past week due to the U.S. credit crisis.
"Fundamentals and share prices are pretty reasonable," he told legislators, without providing details of how many shares or shares of what companies the fund had bought.
The government has taken a series of market-boosting measures, including saying it may use the fund if necessary to help stabilise the market. [ID:nTPU001360]
The financial regulator also said on Sunday that it would reimpose a ban on short-selling shares of 150 Taiwan companies below their closing prices in the previous session, following a similar move by the U.S. government to support U.S. stocks. [ID:nTP105694]
Taiwan's main TAIEX share index had staged a rebound of about 10 percent in the last three sessions, in part thanks to the active buying of the fund and the "Big Four" government funds.
Previously, the market had dropped about 10 percent in the four sessions to Sept 18 to close at its lowest in three years, in response to the global financial turmoil triggered by the collapse of Lehman Brothers (LEHMQ.PK).
On Wednesday, the index fell 0.34 percent and has lost 28 percent since the beginning of the year. (US$1=T$32.0) (Reporting by Rachel Lee; Writing by Faith Hung; Editing by Ken Wills)
