TSMC stock sale makes up 80 percent of stabilization fund's gains

Taipei, Jan. 27 (CNA) The selling of Taiwan Semiconductor Manufacturing Co. (TSMC) shares accounted for almost 80 percent of the profit raked in by the Financial Stabilization Fund following its latest market intervention, according to the fund.

Data disclosed on Friday by the stabilization fund, which is set up to help mitigate market volatility, showed that it pocketed NT$8.32 billion (US$266 million) in net profit through its sale of TSMC shares, which accounted for about 79.7 percent of the total NT$10.44 billion of gains garnered by the fund.

The fund committee said it poured about NT$54.51 billion into the local stock market between July 13, 2022, and April 13, 2023, to counter volatility resulting from the U.S. Federal Reserve's rate hikes that saw it rise from zero in early 2022 to 5.25 percent by July 2023.

The latest market intervention was the eighth that has been made following the establishment of the NT$500 billion stabilization fund by the government in 2000 to serve as a buffer against unexpected external factors that could disrupt the local bourse.

During the intervention, which lasted 275 days and 181 trading sessions, the stabilization fund bought shares worth NT$54.51 billion, the third largest amount after the NT$60 billion it invested in 2008 and NT$120.10 billion it invested in 2000, according to the committee.

Along with the cash dividend income, the stabilization fund garnered about NT$11.3 billion in gains, which represented a 20.7 percent return.

According to the fund committee, the stabilization fund disposed of all the stocks it had bought during the latest market intervention by Dec. 25, 2023.

The stabilization fund bought 15 different stocks, with TSMC, the most heavily weighted stock in the local market, totaling NT$35.86 billion or almost 66 percent of its total investment, the data showed.

The buying of smartphone IC designer MediaTek Inc. shares represented its second-largest investment, totaling 13 percent of the total value. Purchases in power management solution supplier Delta Electronics Inc. represented 7 percent of the total and was the third largest investment, the data showed.

The disposal of MediaTek and Delta Electronics shares resulted in the stabilization fund bagging more than NT$671 million and about NT$600 million, respectively, in gains, according to the data.

In addition to TSMC, MediaTek, and Delta Electronics, the stabilization fund also bought three tech heavyweights -- contract notebook computer maker Quanta Computer Inc., iPhone assembler Hon Hai Precision Industry Co., and IC packaging and testing services provider ASE Technology Holding Co.

The stabilization fund also bought Fubon Financial Holding Co., Cathay Financial Holding Co., E. Sun Financial Holding Co., and CTBC Financial Holding Co. during the intervention, as well as five old economy stocks: food brand Uni-President Enterprises Co., Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp., and Formosa Petrochemical Corp.

Out of the 15 stocks the stabilization fund bought during the intervention, 12 helped the fund generate gains but investments in Hon Hai, E. Sun Financial and Formosa Chemicals & Fibre led to losses of NT$6.2 million, NT$7.54 million, and NT$17.17 million, respectively.

The stabilization fund was called into action in July 2022 a day after the Taiex, the benchmark weighted index on the Taiwan Stock Exchange (TWSE), dipped below 14,000 points for the second time that month after having spent most of the first quarter at around 18,000.

The Taiex surged 13.29 percent during the intervention period, with Deputy Finance Minister Juan Ching-hwa (阮清華), the fund committee's executive secretary, saying the presence of the fund had helped stabilize the stock market.