Sep 8, 2008, 4:09 GMT
Taipei - Taiwan's stocks were sharply higher in early trading Monday, rising more than 5 per cent after the seizure by the US government of the two largest US mortgage lenders and guarantors and on a string of measures planned by the local financial regulator to support the market.
The Weighted Price Index of the Taiwan Stock Exchange, which opened 4 per cent higher, continued its upward trend, rising 340 points, or 5.4 per cent, to 6,647 by mid-morning.
Dealers said the US and Taiwan measures bolstered investor confidence, resulting in heavy buying.
Most major financial shares were up by their 7-per-cent daily limit as the measures to be approved and announced by Taiwan's cabinet on Thursday include relaxation of the criteria for the buyback of treasury shares by financial holding firms.
Finance Ministry officials said Monday that other measures would include establishing an ad-hoc committee by financial authorities to push blue chips listed on the local stock market to launch a treasury share system and encouraging securities and trust companies to issue stock-based mutual funds for investment in the local bourse.
In the United States, the government announced Sunday that the Federal Housing Financing Agency would take over Fannie Mae and Freddie Mac as the US government sought to deflect the rising threat of mortgage defaults to the two companies that manage nearly half of the 12-trillion-dollar US mortgage market.
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