Three Major Institutions Net Sold TWD 43.1 Billion; Jointly Bought 59,355 Shares of Powerchip; Foreign Investors Significantly Increased Short Positions in Taiwan Index Futures

On July 16, trading in the Taipei stock market was cautious ahead of TSMC's (2330-TW) afternoon earnings call, resulting in significantly lower trading volume. The main market closed down 6.61 points at 45,624.98, with turnover shrinking to TWD 900.839 billion. The three major institutional investors collectively net sold TWD 43.143 billion.

Foreign investors primarily sold 52,600 shares of Nan Ya Plastics (1303-TW), while also reducing positions in memory stocks:旺宏 (2337-TW) by 34,000 shares, 南亞科 (2408-TW) by 21,900 shares, and 華邦電 (2344-TW) by 7,487 shares.

On July 16, foreign investors net sold TWD 48.335 billion in the main market, while investment trusts net bought TWD 8.549 billion and proprietary traders net sold TWD 3.358 billion, resulting in a combined net sell of TWD 43.143 billion by the three major institutions. However, all three institutions jointly increased their holdings in Powerchip (6770-TW) by a total of 59,355 shares. In the futures market, foreign investors significantly increased their short positions, posting a net short of 4,896 contracts today, bringing their total open interest net short to 84,453 contracts.

Foreign investors' top net-buy stocks in the main market today included Powerchip, Taiwan Business Bank, Nanya Technology, CTBC Financial Holding, Pou Chen, China Steel, Taiwan Cement, KGI Financial Holding, Chunghwa Telecom, and Far Eastern New Century. Top net-sell stocks were Nan Ya Plastics, Macronix, Nanya Technology, United Microelectronics, Compal Communications, AU Optronics, Zhending-KY, Winbond, China Steel Corporation, and Unimicron.

Investment trusts' top net-buy stocks were Nan Ya Plastics, Powerchip, Taishin Financial Holding & Shin Kong Financial Holding, Formosa Chemicals & Fibers, Unimicron, ASE Holding, Uni-President Enterprises, Shanghai Commercial & Savings Bank, Far Eastern New Century, and Walsin Technology. Top net-sell stocks were China Airlines, United Microelectronics, CTBC Financial Holding, Winbond, Yuanta Financial Holding, Wistron, EVA Airways, Hua Nan Financial Holding,兆豐金控, and Inventec.

Proprietary traders' top net-buy stocks were United Microelectronics, Powerchip, Yuanta Financial Holding, Formosa Chemicals & Fibers,兆豐金控, Winbond, Innolux, Formosa Plastics, Hon Hai Precision Industry, and Everlight Electronics. Top net-sell stocks were Asia Cement, Quanta Computer, Inventec, Formosa Rubber, China Steel Corporation, and Aerospace Industrial Development Corporation.

Senior securities analyst Huang Han-cheng pointed out that the current shrinkage in trading volume in the Taiwan stock market is primarily due to foreign investors' conservative outlook. Additionally, within the electronics sector, sub-groups such as passive components, IC substrates, power components, and CPO in optical communications have sequentially declined, creating heavy resistance at higher levels. Even as stock prices fall, there is weak buying support. These two factors have led to the current pattern of declining volume and prices. He noted that the main market index's support level lies between 43,500 and 43,700 points. However, strong resistance from the 10-day and monthly moving averages has resulted in a high-level consolidation pattern.