Taiwan limits short selling after Taiex worst week since 2001
Taiwan just rolled out stricter rules to limit short selling, hoping to calm the chaos after AI stocks took a nosedive.
The Taiex index suffered its worst week since 2001, briefly dipping into bear market territory before bouncing back a bit.
The short-selling restrictions take effect November 9, and the Finance Ministry's NT$500 billion stabilization fund is prepared for deployment if needed to reassure investors as foreign selloffs continue.
Taiwan raises margin requirements to 130%
Short selling limits are dropping from 30% of a stock's average daily trading volume over the preceding 30 days to just 3% of a stock's average daily trading volume over the preceding 30 days, and you will now need more cash upfront: margin requirements jump from 90% to 130%.
Plus, the government is ready with a $15 billion fund to help steady the market.
A big part of the slump came from Taiwan Semiconductor (TSMC), whose shares led the slump, dropping in tandem with a broader rout in global semiconductor shares, while foreign investors have pulled out over $45 billion this quarter, so yeah, nerves are definitely high right now.