Taipei, Oct. 19, 2012 (CENS)--In view of the shrinking trading volume of the Taiwanese stock market, the Financial Supervisory Commission (FSC) will coordinate with securities firms and securities financing companies to cut the lending rates for margin trading, so as to lower the costs of investors and encourage them to buy stocks.
A ranking FSC official pointed out yesterday (Oct. 18) that in order to expand the trading volume of the stock market, the most important thing is inducement of investors to enter the market by bolstering their confidence and lowering their investment costs. In the aspect of the confidence of investors, the FSC will continue to observe the changes of the local stock market and compare its difference with the international market in performance. Preliminarily speaking, the recent performance of Taiwanese stocks is affected by the international factor and there is no abnormal phenomenon.
Under the instruction of Premier Sean Chen, the FSC has formulated measures to stimulate the trading volume of the stock market. In addition to encouragement for listed companies to purchase treasury stocks and Taiwan Stock Exchange and GreTai Securities Market to hold business-performance publication conferences, the FSC will coordinate with securities firms and securities financing companies to cut lending rates for margin trading. The FSC evaluated that the cut of the lending rates for margin trading will enhance the investment willingness of investors and help solve the problem of low trading volume, a major concern for the stock market at present.
The FSC official noted that there are only three securities financing firms and credit amount for margin trading provided by securities firms is much higher than securities financing firms. Despite the claim of higher funding costs, the FSC still hopes securities firms can cut their lending interest rates for margin trading.
The Securities and Futures Bureau, under the FSC, attributed the shrunken trading volume of Taiwanese stocks to the wait-and-see attitude among investors, as they are observing the performances of major international enterprises, changes in the growth rate of the Chinese economy, the trend of the global economic development, and performances of domestic listed firms.
(by Ken Liu)
