Taiwan Stock Market Pre-Market News: 2,000-Point Plunge Triggers Deleveraging, Margin Loans Drop by NT$23.1 Billion, Maintenance Ratio Falls to 163%

July 29 Taiwan Stock Market Pre-Market News

1. On July 28, Taiwan's stock market closed down 2,030 points, marking the third-largest point drop in history, ending at 41,603 points. This not only broke the previous low but also marked a two-month low. Foreign investors simultaneously shorted both futures and spot markets, adding 3,556 short contracts in futures, bringing net short positions to 82,255 contracts. They also heavily sold NT$87.5 billion in the spot market, adjusting across active ETFs, leveraged ETFs, index ETFs, and high-dividend ETFs. Eight of the top ten foreign sell-short positions were ETFs, totaling over 640,000 lots sold.

2. On July 28, Taiwan's margin loan balance dropped sharply by NT$23.128 billion to NT$545.535 billion, down from the peak of NT$630.812 billion on July 3—a decrease of NT$8.5277 billion, or 13.51%. The overall margin maintenance ratio also rapidly declined from 173.46% on July 27 to a low of 163.08%.

3. South Korea, Japan, and Taiwan's stock markets were simultaneously battered on July 28, as foreign investors withdrew capital and repatriated funds. The New Taiwan Dollar (NTD) depreciated by up to 1.5 cents against the U.S. dollar, breaking below the 32.40 level. However, month-end foreign exchange selling by exporters and central bank intervention helped stabilize the currency. The NTD ended at 32.384, down 7.9 cents, with total trading volume in Taipei and Yuan Ta forex markets reaching $2.558 billion.

4. Concerns continue over the 'Four Loans Together' phenomenon—mortgages, auto loans, consumer loans, and stock margin loans—fueled by Taiwan's stock market boom, potentially triggering a credit risk crisis. On July 28, the Financial Supervisory Commission (FSC) stated that after consulting with selected banks, the proportion of customers holding two or more types of loans was 'extremely low,' in the low single-digit percentage range. With the overall non-performing loan ratio remaining low at 0.14% to 0.16%, leverage risks remain manageable. Additionally, the FSC is accelerating cross-industry credit risk prevention between banks and securities firms through two-way information sharing to prevent excessive expansion and build a more robust risk protection network.

5. A magnitude 7.1 earthquake struck Kumamoto Prefecture, Kyushu, Japan, on the afternoon of July 28, with maximum intensity reaching level 7 and a tsunami advisory briefly issued, shaking the local semiconductor supply chain. In response to concerns about damage to Taiwanese manufacturers and their supply chains, Taiwan's Ministry of Economic Affairs (MOEA) immediately clarified that factories of Advantech, Delta Electronics, Yoken, and Tokyo Star were not directly affected. TSMC (2330-TW) also responded, stating that emergency evacuation and headcount procedures were underway as per protocol.

6. Macronix (2337-TW) held its earnings call on July 28, announcing that its board approved an additional capital expenditure of NT$15.8 billion to expand advanced process and related production capacity in response to surging customer demand. Combined with the initial investment of approximately NT$22 billion planned at the beginning of the year, this brings total expansion investment to NT$37.8 billion. Equipment will be gradually installed starting in the second half of 2026, with major production contributions expected to materialize in 2027.