TAIPEI (Taiwan News) — Taiwan’s stock market saw a weak opening and a further decline on Wednesday (Sept. 20), per UDN.
Due to the continuous fall in the U.S. stock market and ongoing selling abroad, the Taiwan Stock Exchange Corporation (TAIEX) had a weak performance, closing down 101 points at 16,534 points and triggering alarm bells for the half-year support line at 16,494 points. On the trading floor, the entire list of "thousand-dollar club" stocks became a selling pressure release point, with notable weaknesses in three stocks: ASPEED Technology Inc. (5274.TWO), Alchip Investment Inc. (3661.TW), and ASMedia Technology Inc. (5269.TW), all of which plummeted by more than half a board limit.
Taiwan's stock market has recently turned weak, and the market sentiment has reflected this, UDN stated. Especially yesterday, as the index oscillated and retreated under market selling pressure, the "thousand-dollar club" became the weak point on the trading floor, with stock king ASPEED Technology Inc., runner-up Alchip Investment Inc., and ASMedia all falling by over 5%.
Global Unichip (3443.TW) dropped by more than 4%, while Jinan Acetate Chemical Co. (4763.TW) and Parade Technologies, Ltd. (4966) dropped by more than 3%, with all three facing the challenge of defending the thousand-dollar mark.
Market analysts said that the selling pressure to unravel the long positions in Taiwan's stock market is ongoing. In addition, the market is watching the Federal Reserve's interest rate decision, which has reduced the willingness of chasers to enter the market, according to UDN.
With the index falling for three consecutive days, it has approached the half-year support level.
In terms of the movements of the three major institutional investors, they collectively sold NT$25.18 billion (US$783.8 million) in Taiwan stocks yesterday. Among them, foreign investors sold NT$18.19 billion, marking the third consecutive day of net selling and a cumulative net selling of NT$56.58 billion.
On the other hand, trust institutions bought a net of NT$2.36 billion, marking the 35th consecutive day of net buying and a cumulative net buying of NT$105.84 billion. Proprietary traders sold a net of NT$9.34 billion, marking the fourth consecutive day of net selling and a cumulative net selling of NT$28.25 billion.
The eight publicly-owned banks bought a net of NT$3.726 billion, marking the third consecutive day of net buying and a cumulative net buying of NT$14.681 billion. As for the futures market, foreign investors reduced their net short positions by 2,234 contracts to 6,165 contracts yesterday.
Foreign investors are currently adopting a two-pronged strategy of selling spot and reducing futures short positions, mainly focusing on hedging and avoiding pure long or short bets, UDN reported.
Regarding the overall decline of the thousand-dollar stocks, Huang Wen-qing (黃文清), deputy general manager of Taishin Securities Co., Ltd., and Chen Yi-guang (陳奕光), chairman of First Capital Management, said that the "thousand-dollar club" usually has the advantages of a small capital base, lightweight chips, and must be in line with the positive industry trend, have a leading position in the industry, and even continuously expand market share, driving the growth of earnings per share (EPS) year by year. All these conditions must be met to become a representative of thousand-dollar stocks, UDN reported.
However, due to the successive entry of institutional investors and major players into the high-priced group this year, in the case of extremely concentrated funds, the price-to-earnings ratio and price-to-book ratio of high-priced stocks in the "thousand-dollar club" have risen significantly, and it is necessary to be aware that they have become alternative speculative stocks, UDN said. Whether high-priced stocks can stabilize the situation in the future is expected to be closely related to the overall development of the Taiwan stock market, UDN added.
