The Hong Kong model is used in Taiwan. They used the "stabilization funds" to rig the markets.
biz.yahoo.com
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Thursday March 16, 9:42 am Eastern Time
CORRECTED - CORRECTED - CORRECTED-FOCUS-Taiwan opens stocks war chest
In TAIPEI item headed ``FOCUS-Taiwan opens stocks war chest amid China threat,' please read in para 4...close 0.49 percent higher at 8,682.76...instead of...0.44 percent higher at 8,677.96 (corrects figures)
A corrected repetition follows:
(Recasts, adds use of stabilisation fund, defence minister)
By Benjamin Kang Lim
TAIPEI, March 16 (Reuters) - Taiwan pulled out a multi-billion dollar chest for the first time on Thursday to rescue a stock market rocked by threats from Chinese Premier Zhu Rongji ahead of weekend elections.
Taiwan's defence minister and leading presidential candidates reacted defiantly to Zhu's warnings aimed at scaring away voters from pro-independence candidate Chen Shui-bian.
The benchmark TAIEX (^TWII - news) index lost as much as 4.51 percent in early trade after Zhu said the Chinese were ready to ``shed blood' to stop Taiwan from breaking away.
Authorities then unleashed a wave of buying from a ``stabilisation fund' and stocks rebounded to close 0.49 percent higher at 8,682.76.
Hotung Securities researcher Albert Lin said that after the intervention ``confidence improved slightly.'
The government has raised T$200 billion ($6.51 billion) for the fund, which aims eventually to be as large as T$500 billion.
U.S. URGES PEACE
In Japan, U.S. Defence Secretary William Cohen urged the two rivals to settle their differences peacefully.
``The comments about the use of force can only be seen as being contrary to our policy,' Cohen told reporters during a visit to a U.S. base outside Tokyo.
China, which has considered Taiwan a renegade province since the communists won the civil war in 1949, conducted menacing war games near Taiwan in the run-up to the island's first presidential elections in 1996.
Taiwan Defence Minister Tang Fei said the island did not seek war with China, but neither did it fear conflict.
``The national armed forces will never seek war, but to maintain our democratic politics, they will not resist war either,' the minister said.
Chen condemned Beijing's ``terror tactics' at a rally on Wednesday, but he was more subdued on Thursday, apparently to avoid further antagonising Beijing.
``The Democratic Progressive Party has already expressed the greatest goodwill, sincerity and responsibility, and proposed many constructive views on peace between the Taiwan Straits,' he told reporters.
``Beijing authorities should recognise that threats will only make Taiwan walk farther away and disrupt normalisation of cross-strait relations,' Chen said.
The president ``should be chosen by the Taiwan people, and Beijing authorities should not interfere,' he said.
With just two days to go before the election, Chen's Democratic Progressive Party is on a roll, threatening to end more than 50 years of Nationalist Party rule.
NOT WORRIED ABOUT WAR - POLL
A survey in the mass-circulation China Times showed that 40 percent of 782 respondents believed Zhu's remarks would have an impact on the elections, while 29 percent disagreed.
The poll showed 51 percent of the respondents were not worried about the possibility of war breaking out, while 42 percent were anxious.
Chen is running neck and neck with Lien Chan of the ruling Nationalist Party and independent James Soong.
Lien also rebuked Zhu, saying ``no person or country, including Communist China, is in a position to intervene in Taiwan's democratic elections.'
Seizing on Zhu's comments, Lien urged Taiwan voters to make a ``wise choice' for the sake of peace and economic development.
``The Nationalist Party is the only political party with the experience, determination, goodwill and ability to handle cross-strait relations,' he told a news conference.
He said those who advocated a separate state were like a ``naughty child,' but this was ``part of the democratic process' and Taiwan did not need lectures from outside.
Soong said Taiwan ``will not accept threats of military force.'
($1 equals TW$30.75) |
