Markets
Taiwan Deploys NT$500B Fund and Curbs Short Sales
Taiwan activated its NT$500 billion National Financial Stabilization Fund and tightened short-selling rules on November 9 after a seven-day stock rout.
Taiwan's authorities stepped in before Monday's open. The National Financial Stabilization Fund, authorised on Friday, November 6, with NT$500 billion available to buy stocks, was activated on Monday, and the Financial Supervisory Commission tightened short selling: the cap on intraday short-sale orders using borrowed shares fell to 3% of a stock's 30-day average daily volume from 30%, and the minimum margin on short sales rose to 130% from 90%.
The Taiex responded at once. It rose more than 5% in Monday trading, its biggest gain since July 31, according to Bloomberg, and ended a seven-session losing streak that was the longest since 2022 and had pushed the index into a bear market. TSMC and MediaTek each rose at least 5%; the Associated Press put TSMC's gain at 5.6%.
The fall that preceded it was among the worst in the market's history. On Friday the Taiex closed at 39,701.64, down 1,873 points or 4.51%, the fourth-largest one-day point loss on record, and at its low it had been down more than 3,700 points, the largest intraday point drop ever. TSMC, which makes up more than 40% of the market's value, was down about 10% at one point and closed 4.69% lower at NT$2,135. Foreign investors sold a net NT$91.19 billion on Friday and NT$705.7 billion over the seven sessions, the Taipei Times reported.
Part of Monday's rebound was imported. In New York, TSMC's American depositary shares rose 6.3% on Friday to $375.44 and the Philadelphia semiconductor index gained 4.2%, after Thursday's 12% collapse in chip stocks. Taiex night-session futures had pointed to a gain of only about 1.6%, so the policy package added most of the move at the open.
Support funds and short-sale limits can stop forced selling, but they do not change what the market is worried about: whether the AI data-centre build-out slows after the US midterms. TSMC's October revenue, due on Tuesday, November 10, and Nvidia's results on November 17 will say more about that than the stabilisation fund. If buyers disappear once the fund stops bidding, Monday will look like relief rather than a bottom.