Foreign Investors Reduce Net Buy to NT$2 Billion, Heavily Buying Powerchip and Innolux; Offloading Financial Stocks

Taiwan's stock market declined on Wednesday (August 6), closing at 44,396.7 points — down 214.9 points or 0.48% — due to weakness in major electronics stocks. Total trading volume shrank to NT$969.47 billion. On the day, the three major institutional investors collectively bought a net NT$4.56 billion worth of shares.

Foreign investors' net buy decreased significantly from the previous day’s NT$90.3 billion to just NT$2.02 billion. The top two beneficiaries were Yuanta Taiwan 50 Bear 1 (00632R-TW) and Powerchip Semiconductor Manufacturing Corporation (PSMC, 6770-TW).

Breaking down the institutional activity: foreign investors bought a net NT$202 million, domestic institutional investors (trust companies) bought NT$8.856 billion, while proprietary traders sold a net NT$631 million, resulting in a combined net purchase of NT$4.56 billion. In futures positioning, foreign investors increased their net short position by 2,121 contracts to reach 89,300 contracts, nearing the historic high of 90,000.

Among foreign investor buys, Yuanta Taiwan 50 Bear 1 led with 46,000 lots purchased, followed by PSMC with 38,600 lots, and Innolux with 37,700 lots. Other notable purchases included Active United Upgrade 50 ETF (00403A-TW) with 36,700 lots, Hon Hai Precision with 21,700 lots, China Steel with 16,200 lots, Far Eastern New Century with 14,400 lots, UMC with 14,400 lots, and Taiwan Cement with 14,300 lots.

On the sell side, six of the top ten foreign-sold stocks were financials. Taipei Fubon Commercial Bank topped the list with 23,300 lots sold, followed by First Financial Holding (21,600), Bank of Taichung (20,900), Capital Securities (19,700), Active United Global Innovation ETF (00988A-TW, 18,500), China Synthetic Fiber (18,200), Qiunyi Taiwan High-Dividend Select (00919-TW, 17,500), Mega Financial Holding (16,100), and Taishin & Shin Kong Financial (15,900). TSMC was also sold down by 4,011 lots.

For trust investors, the top three net buys were all financial stocks: Hua Nan Financial Holding (10,400 lots), Mega Financial (7,520), and First Financial (7,361). Others included Yuanta Taiwan 50 ETF (0050-TW, 5,800), Macronix (5,080), Capex-KY (2,715), Jingsheng (2,051), Active Nomura Taiwan Preferred (00980A, 1,980), and Walsin Technology (2,020).

Trust investors’ top sells included UMC (6,458 lots), Fubon Financial (3,184), Yung Ching Financial (1,879), Yuanta Financial (1,821), Shanghai Commercial Bank (1,395), Taishin & Shin Kong Financial (1,311), Nan Ya Plastics (1,205), as well as China Airlines, Uni-President Enterprises, and Changhua Bank.

Market analysts noted that the TAIEX continues its pattern of large-cap consolidation and sector rotation. Although the index briefly broke below the 20-day moving average during the session, it recovered to close above all key moving averages. Support is now seen around 44,000 points, while resistance remains between 44,600 and 45,000. For a stronger breakout, investors will watch whether TSMC and MediaTek can stabilize, and whether the over-the-counter market maintains its strength.

Later today, U.S. initial jobless claims data will be released, followed by Friday’s (August 7) non-farm payrolls report — both will test the validity of recent ADP employment figures. Until then, heightened volatility at current elevated levels should be expected.