Guoan Fund starts to protect the market to see how "it" looks. The rise and fall of Taiwan's stock market is linked to "this index"
Affected by the slump in international capital movements and technology stocks, Guoan Fund announced its entry into the market to stabilize the Taiwan stock market.
Quick Look
- Taiwan’s National Security Fund announced that it would launch the 10th time in history to protect the market starting from the 9th, in response to the lack of confidence in Taiwan’s stock market caused by the recent sharp movement of international funds and the slump in technology stocks.
- Taiwan stocks have fallen by more than 20% since their October high, and foreign investors continue to sell off.
- The government will stabilize market confidence through an entry mechanism.
AI-generated summary
Why It Matters
The Guoan Fund was established in 2000 to respond to market disorder caused by unexpected external shocks. This is the 10th time in history that the market protection mechanism has been launched.
Taiwan’s National Security Fund authorized the 10th time in history to launch market protection tomorrow (9th), and investors are concerned about whether Taiwan stocks will stop falling. Guoan Fund believes that Taiwan's economic fundamentals are still good, but due to the impact of the plunge in U.S. technology stocks and the substantial movement of international funds, there has been a lack of market confidence, which meets the conditions for launching a stable market mechanism.
According to the National Security Fund Committee, TSMC fell 12.19% this week. Among the indexes listed, only the Philadelphia Semiconductor Index fell more, reaching 15.7%. The committee also added that as of November, foreign institutions had sold a net NT$524.4 billion of Taiwanese stocks.
The committee said Taiwan's economic fundamentals remain solid and its technology industry is strong. Taiwan stocks are closely tied to the Philadelphia Semiconductor Index, so the fund needs to take action now.
The Taiwan Stock Index closed down 1,873.08 points, or 4.51%, at 39,701.64 points last Friday (6th), falling below the 40,000-point mark, after the stock market fell sharply on Wall Street overnight.
The support comes after Taiwan's stock market fell for a month. Since hitting an intraday high of 49,968.92 points on October 6, the Taiwan Stock Index has fallen by approximately 10,267 points, or 20.55%. Foreign institutional investors continued to sell off, with net sales of Taiwanese stocks reaching 994.32 billion yuan (approximately US$30.3 billion) in October, setting a record for a single month in history.
The National Security Council pointed out in a statement that there continues to be uncertainty in world politics and the global economy. The statement said that both U.S. and Asian stock markets suffered sharp sell-offs after the U.S. midterm elections.
The government established a 500 billion yuan response fund in 2000 to protect the market from unexpected external shocks. After the Trump administration announced reciprocal tariffs, the National Security Fund most recently intervened, with its entry period from April 9, 2025 to January 12, 2026.
Previously, the National Security Fund intervened in 2000, 2004, 2008, 2011, 2015, 2020 and 2022.
In a separate statement, the Financial Supervisory Commission said it had urged listed companies to buy back their own shares. The regulator also cut the amount of stock lending available for short selling and raised the margin stock borrowers must pay.
What to Watch
AI outlook — possibilities, not facts
Guoan Fund will officially enter the market to protect the market on the 9th
Very likely · Within days
Open Questions
- What is the actual scale of capital invested by the National Security Fund?
- How long will the protective measures last?
