March 11, 2020 / 3:23 AM / 25 days ago

UPDATE 2-Taiwan readies plans to stabilise stock market amid virus fears

(Updates with market close, penultimate paragraph)

TAIPEI, March 11 (Reuters) - Taiwan’s financial authority said on Wednesday it had readied a plan to stabilise the island’s stock market and was looking at banning short-selling of stocks under certain circumstances.

The regulator’s plan comes days after its main equities board saw record foreign capital outflows in the face of worries about the impact of the coronavirus outbreak.

However, the head of the Financial Supervisory Commission, Wellington Koo, told reporters in Taipei that the agency had not yet seen the need to implement the plan.

Foreign investors on Monday sold T$54.6 billion ($1.82 billion) of Taiwan stocks - the largest single day outflow since the 2008 financial crisis - as global stocks crashed due to an oil price war and fears over the fast-spreading virus.

In a report to parliament on Tuesday, Taiwan’s central bank said the spread of the virus presents a major uncertainty for the economy, which is a key link of the global technology supply chain, and could shave up to 0.7 percentage points from economic growth this year.

Some Taiwan manufacturers have already felt the pinch. Apple Inc manufacturing partner Foxconn last week reported its biggest monthly drop in revenue in about seven years as the outbreak wreaked havoc with its business.

Taiwan is rolling out a T$60 billion stimulus package to help soften the economic impact and Premier Su Tseng-chang has said the government is considering plans to boost it further.

Taiwan’s main stock index closed down 1% on Wednesday, and is down about 9% for the year.

Taiwan, whose largest trading partner is China, cut its estimate for 2020 economic growth to 2.37% last month. (Reporting By Emily Chan and Yimou Lee; Editing by Shri Navaratnam and Anil D’Silva)

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