Foreign Investors' Net Short Position on Taiwan Index Futures Nears 70,000 Contracts; Increased Buying in Active ETFs, Memory, and Financial Stocks

Central News Agency Report

(CNA reporter Chung Jung-feng, Taipei, June 16) Taiwan's stock market rose 412.2 points today, closing at 45,809.19, the highest point of the session. Foreign and mainland Chinese investors bought a net NT$40.798 billion worth of shares. According to statistics, foreign investors have increased their holdings in Taiwan stocks for three consecutive days, accumulating about NT$116 billion. Meanwhile, domestic institutional investors (trusts) have bought for 13 consecutive days, totaling about NT$123 billion. However, foreign investors' net short position on Taiwan index futures (TX futures) is nearing 70,000 contracts. Today, foreign funds heavily bought active ETFs, memory stocks, and financial shares, while trimming positions in Powerchip, panel makers, and steel-cement stocks.

The Taiwan Weighted Index rose 412.2 points today, closing at its intraday high of 45,809.19, with total trading value, including after-hours trading, reaching NT$1.24111 trillion. All three major institutional investors—foreign and mainland Chinese investors, investment trusts, and proprietary traders—were net buyers, totaling NT$58.273 billion. Proprietary traders bought NT$6.089 billion, investment trusts bought NT$11.386 billion, and foreign and mainland Chinese investors bought NT$40.798 billion.

Statistics show that foreign investors have cumulatively bought approximately NT$116 billion in Taiwan stocks over three days, while investment trusts have bought about NT$123 billion over 13 consecutive days.

Regarding net positions on Taiwan index futures, the three major institutional investors increased their net short positions by 4,320 contracts to 10,734 contracts. Foreign investors' net short position increased by 3,113 contracts to 69,847 contracts.

Analyzing foreign investors' buying and selling activities in individual stocks, according to Taiwan Stock Exchange statistics, foreign investors heavily bought the active ETF Uni-President Upgrade 50 (00403A), purchasing 151,300 shares. They bought 46,900 shares of Nanya Technology, added 38,600 shares of KGI Innovation Technology (00992A), and bought over 30,000 shares each of Winbond Electronics, E.Sun Financial, and Hua Nan Financial. They also bought over 20,000 shares each of United Microelectronics Corporation (UMC), KGI Taiwan Top 50 (009816), and Taishin & Shin Kong Financial. Foreign investors actively increased their holdings in active ETFs today.

In contrast, foreign investors reduced their holdings in Powerchip by about 73,900 shares, trimmed China Steel by 25,500 shares, and sold over 20,000 shares each of United Renewable Energy and Dahua Youli High Dividend 30 (00918). They also adjusted positions in AU Optronics, Dah Cheng Steel, Innolux, and Taiwan Cement by over 10,000 shares each.

Lin Han-wei, analyst at Moore Investment Consulting, said in a phone interview with reporters that today's Taiwan stock market showed a volume-increased consolidation at high levels. However, with the Dragon Boat Festival holiday approaching, market operations are leaning toward short-term trading, with rapid stock rotation. As the market approaches 46,000 points or previous resistance zones, profit-taking selling pressure has emerged from some investors. Nevertheless, domestic institutional investors, including investment trusts and retail investors, continue to increase their holdings in Taiwan stocks. Market funds continue to flow into benchmark active ETFs, and the bullish rotation structure of the Taiwan stock market remains unchanged.

Observing foreign investors' positioning, Lin Han-wei stated that Taiwan index futures still maintain a positive price spread (contango). With foreign investors' net short position nearing 70,000 contracts, it suggests that due to the positive spread, short positions are difficult to unwind. In the short term, foreign investors may continue to increase their spot holdings in Taiwan stocks while maintaining their short positions in Taiwan index futures.

Looking ahead, Lin Han-wei pointed out that with the Dragon Boat Festival holiday approaching, market participants should observe subsequent willingness to chase higher prices and foreign investors' positioning movements after the Taiwan index futures settlement on the 17th. If the weighted index rises moderately and steadily, it has the opportunity to extend the bullish momentum.

Regarding international markets, Lin Han-wei noted that U.S. stocks are at historical highs. This week, attention is focused on the outcome of the U.S. Federal Reserve's interest rate decision meeting and the 'quadruple witching day' market movement on the 18th. Additionally, progress on the U.S.-Iran agreement planned for the 19th is also being watched. (Edited by Yang Lan-hsuan) 1150616