Call-back pressure stabilizes TAIEX

The China Post news staff

Although senior officials yesterday denied that public money has been used to shore up share prices, the effect of other government measures to stabilize the stock market was evident, as prices bucked the ongoing down trend in a short-lived but robust rally. The weighted index ended the day at 6784.52, down 79.87 from Thursday, Nov. 25. Vice Premier Sean Chen(陳冲) yesterday told reporters he respected resolutions adopted by the management committee of a National Security Fund, but committee members had not met lately, adding money from the fund would be injected into the stock market only if it was called for. Echoing Chen’s position, Premier Wu Den-yih also said use of the fund would not be rash or impulsive, but would conform to professional principles and the laws, adding he would not interfere in what Chen is doing. Chen, however, did not say whether other government funds, such as the health insurance fund, had contributed money to government efforts at keeping stock prices afloat. According to Yang Chao-jung (楊朝榮), vice chairman of the Taiwan Stock Exchange Corp. (TWSE), the other four major government funds have been mobilized. But Yang refused to disclose the exact amount of money involved. While acknowledging the recent slump in stock prices has been quite serious, Chen denied that the government is trying to rein in speculation, especially short shelling, on the stock exchange by setting its crosshairs on specific foreign investors who have been going short with borrowed securities.

“We are absolutely doing nothing of that sort,” he stressed, while denying the stock market is being strangled by government restriction.