Financial Supervisory Commission (FSC) Chairman William Tseng is encouraging listed Taiwanese companies to buy back their shares.
Tseng called on companies to buy back shares during a cabinet meeting on Thursday after the Taipei stock market fell below the 9,000-point threshold the day before. Tseng attributed the fall to the Greek debt crisis, an export slump in June, a nosedive on the Chinese stock market, and a downward revision of Taiwan’s GDP growth rate.
Tseng said the Taiwanese stock market lost almost 1,000 points, but the revenues of listed companies from January to May actually grew by 2% compared to the same period last year. He said this shows they have sound fundamentals. Tseng said that listed companies should buy back their shares as an indication of confidence and as a way to stem further declines in their share prices. He also said the FSC is encouraging listed companies to hold conferences to allow investors to know that they are in fact performing strongly.
Tseng also said that despite the stock market fall on Wednesday, transaction volume still exceeded NT$170 billion (about US$5.5 billion). He said this means some investors were buying on the dips.