[Reported by Taiwan Wake News reporter Jian Jiayou in Taipei]The air restriction order is a double-edged sword! When the chairman of the FSC, Huang Tianmu, went to the Legislative Yuan for inquiries on the 12th, the legislators asked whether the FSC’s expanded air restriction order on the 11th was effective and whether it would lead to a shrinking transaction volume? Huang Tianmu responded that the stock market trading volume will indeed be affected, but it can delay the decline of Taiwan stocks, emphasizing that the purpose is to “stabilize the market and investors’ confidence.”
Air-limited double-sided blade
After the Taiwan stock market fell by nearly 600 points on the 11th, it once fell below the 13,000 mark in the early trading on the 12th. The Financial Supervisory Commission announced on the 11th to expand the air restriction order. Quantity, 20% of the daily average transaction volume in the first 30 business days, further reduced to 10%; in addition, the margin ratio for securities lending was adjusted from 100% to 120%.
Kuomintang legislator Lin Defu said that the FSC will expand the air restriction order and will the onion-shaving strategy to save Taiwan stocks work? Huang Tianmu responded that the rescue measures will be “gradually approached”. When Taiwan stocks do not perform well, the measures will be more intense. Now the spread of negative sentiment in the market does not know how long it will last, and it will continue to be observed.
Lin Defu asked, will the stock market trading volume shrink because of the air restriction order? Huang Tianmu also said, “Everything must have a dilemma, and the transaction volume will indeed be affected, but at least more than 200 billion on the 11th, the transaction volume will be less when the space is limited.” He also said that various measures are within the scope of thinking, following all This situation has never been encountered before. The government has introduced relevant measures in the hope of stabilizing the market and investors’ confidence.
Only the life insurance industry is suitable for redistribution
In addition, the life insurance industry is facing a net worth crisis, and the FSC agrees to reclassify financial assets in accordance with the IFRS9 Bulletin. Huang Tianmu revealed in the Legislative Yuan’s inquiry on the 12th that there are 4 life insurance companies that want to reclassify assets, involving 17.18 million policyholders. The total assets account for 46.76% of the overall life insurance industry, and the premium market share is also as high as 41.9%.
Guo Guowen, a legislator of the Democratic Progressive Party, said why only the life insurance industry can carry out asset reclassification, but not other industries such as banking? Huang Tianmu responded that the US eagle-style interest rate hike has an impact on many assets, but the old international financial reporting standards have resulted in a mismatch between assets and liabilities, and it is impossible to faithfully present fair values. Currently, only the life insurance industry is suitable for asset reclassification.
Guo Guowen also said that these life insurance companies cannot be allowed to arbitrarily transfer financial risks. In the future, these reclassified companies should be strictly scrutinized when raising funds in the public capital market through IPO (initial public offering). Huang Tianmu said that some companies have already undergone strict scrutiny when they want to IPO, and agreed to say “then they will be strictly scrutinized.”
