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Taiwan Finance Minister says now not the time to intervene in markets

Stock MarketsJan 30, 2020 09:46PM ET
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© Reuters. Taiwan Finance Minister says now not the time to intervene in markets

TAIPEI (Reuters) - Now is not the time for Taiwan's National Stabilisation Fund to intervene in the stock markets, which rebounded after a big fall the previous day on fears of the spread of the coronavirus, Taiwan's Finance Minister Su Jain-rong told Reuters on Friday.

Fears about the impact of the new coronavirus on Taiwan's top trading partner prompted Taiwan President Tsai Ing-wen on Thursday to say the government would act to stabilize the stock and foreign exchange markets.

Some 40% of Taiwan exports go to China, meaning it is vulnerable to any slowdown in the Chinese economy due to the spread of the coronavirus. More than 200 people in China have died, and the World Health Organization has declared a global emergency.

Taiwan's main stock index (TWII) was up 0.50% at 10.30 a.m. (0230 GMT), off earlier highs.

Su said the fund can meet at any time to react to market turbulence, though described market fundamentals as sound.

"If there are large outflow from foreign investors which cause disorder in the financial markets then the National Stabilisation Fund will hold an ad hoc meeting. It's on stand-by for any time," he said.

Taiwan's economy is also on good footing, Su added, pointing to previous government expectations of 2.72% growth this year and Taiwanese investment returning to the island from China, a trend Taipei has encouraged amid the China-U.S. trade war.

The fund will continue to play close attention to movements in both the stock and foreign exchange markets, Su said, calling on investors not to be overly concerned by recent market fluctuations.

On Thursday, Tsai said the government will look at helping companies who have been affected, including in the tourism and travel industry, and may consider whether a special budget is needed depending on how the virus situation develops.

Analysts at ANZ this week named Taiwan and Vietnam as the two economies most exposed to potential impacts on growth and trade from the virus outbreak.

Taiwan has so far reported nine cases of the virus, and has taken a series of strong measures to prevent its spread, including stopping most Chinese visitors from coming to the island.

Taiwan Finance Minister says now not the time to intervene in markets
 

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