Taiwan Stock Market Reclaims 45,000-Point Threshold; MSCI Weight Adjustment May See Minor Cut

U.S. major indices closed higher last Friday (August 7), with the Philadelphia Semiconductor Index soaring 2.56%. Taiwan stock index futures rose 736 points, closing at 45,033, reclaiming the 45,000-point threshold ahead of schedule. After gaining 1,106 points in the first week of August, Taiwan's stock market is set to face MSCI's quarterly index adjustment, the official launch of new delisting stock regulations on Monday (August 10), and the gradual release of July revenue reports and semi-annual financial statements—factors that could fuel further market rebound.

MSCI's quarterly review of Taiwan's index weightings is scheduled for announcement in the early hours of August 13. Investment advisory firms highlight that four stocks—Nanya Technology, Winbond Electronics, Phison Electronics, and Kinpo Electronics (Kinsus Interconnect Technology)—may be added to the index components. However, Taiwan's stock market dropped 3,006 points in July, showing signs of weakening. Market capitalization fell from $4.6 trillion to $4.3 trillion within a month, increasing the likelihood of a minor downgrade in Taiwan's MSCI weighting.

Huang Wen-ching, CEO of Taishin Investment Advisory, stated, "Overall, geopolitical tensions between the U.S. and Iran may ease or reach a temporary resolution, reducing the risk of escalation in the short term. Additionally, the U.S. reported a surprising decline in July's non-farm payroll numbers, lowering market expectations for a September rate hike by the Federal Reserve (Fed). Although the S&P 500 has hit record highs, strong earnings from the AI sector suggest further upside potential for U.S. equities, which could positively impact Taiwan's market."

Regarding strong-performing sectors in Taiwan, Huang emphasized that investors should continue focusing on AI-related stocks, including semiconductor equipment and materials, server rails, and AI server-related themes.

The Taiwan Stock Exchange recently revised its delisting stock regulations. The new rules, effective August 10, significantly shorten the suspension period, reduce matching intervals, and adjust thresholds for monitored stocks.

Huang commented, "The new measures by the Taiwan Stock Exchange and GreTai Securities Market to relax trading suspensions and shorten lockout periods will improve trading efficiency. This is positive for Taiwan's market outlook and volume expansion, potentially making market transactions more active and smoother."

Foreign investors' weekly net buying was dominated by ETFs. Top buys included Yuanta Taiwan Top 50 ETF (00403A-TW) with 236,000 contracts, Mega Taiwan 50 Inverse -1 ETF (00632R-TW) with 225,000, UBS Taiwan Growth ETF (00981A-TW) with 164,000, Cathay Taiwan TOP 50 ETF (009816-TW) with 148,000, Mega Taiwan 50 Bull 2X ETF (00631L-TW) with 118,000, Mega Taiwan 50 ETF (0050-TW) with 116,000, and Fubon Future 50 ETF (00991A) with 87,000. Among the top 10 net buys, the first seven were primarily active, passive, and inverse ETFs.