Taiwan Stock Market Update: 0056 Hits Hard as TWD Rises 1.48 Cents
Table of Contents
You might want to know
- What factors contributed to the significant selling of 0056 ETF?
- How did the 21st April market behavior influence investor strategies?
Main Topic
On April 21, the Taiwan stock market opened low and ended with a 288-point drop, closing at 19,106 points. Trading volume was comparable to the previous day at NT$208.4 billion. Foreign investors continued to sell off shares, particularly focusing on traditional industries and high-dividend ETFs. This is evidenced by the aggressive sale of Yuanta High-Dividend ETF (0056-TW), which saw large-scale transactions, totaling almost 116,000 units as it set to go ex-dividend on April 23.
It became apparent that both domestic and foreign institutional investors coupled their efforts to adjust this ETF, approaching nearly 100,000 units sold.
In the foreign exchange market, Taiwan's New Taiwan dollar strengthened significantly as the US dollar index fell below 99 and then 98. The currency ended the session at NT$32.46, up by 1.48 cents. The Taipei Foreign Exchange brokerage posted a trade value of US$1.058 billion. This strong appreciation highlights a decoupling trend between the stock and forex markets observed on the same day.
March was tumultuous for the Taiwan stock market, with an overall decline of 2,357 points. According to the Taiwan Stock Exchange, securities firms saw a sharp decline in post-tax profits to just NT$104 million—compared to the previous month’s figures, which fell by over 98.62%. Over the first quarter, the profits of all securities firms dropped by NT$12.63 billion (about 47.99%) from the previous year.
As the April 21 session closed with a 288-point dip, the 19,000-point level faces another critical test. Yet, investors in high-dividend ETFs keep up with the investment strategy of ‘lower prices, higher dividends’. Yuanta High-Dividend ETF (0056-TW), soon to distribute dividends, topped the trading volume leaderboard with over 116,000 units exchanged, with its net purchase since the year's start poised to breach the NT$100 billion mark.
The renowned chip manufacturer, Taiwan Semiconductor Manufacturing Co. (TSMC) (2330-TW), recently published an impressive earnings report with promising forward-looking statements, leading to a slight recovery in market sentiment. For the week, the weighted index saw a slight drop of only 0.68%. Investors continue to accumulate stock ETFs amid declines, pushing the number of beneficiaries beyond 11 million - a historical peak. However, the US Treasury bond sell-off continues, with bond ETF beneficiaries dropping by nearly 10,000 last week, marking a total decline of over 130,000 since the year began.
Meanwhile, Anson Biotechnology (6610-TW) announced a decision at its April 21 board meeting to merge with Dukun Pharmaceuticals through a 1-to-1 stock swap. This strategic merger, pending approval at the shareholder meeting on June 6, expects to increase capital from NT$876 million to NT$1.836 billion with a provisional merger date of September 30.
Key Insights Table
| Aspect | Description |
|---|---|
| Institutional Sales | Huge sell-off in 0056 ETF driven by both domestic and foreign investors. |
| Currency Movement | New Taiwan Dollar rose by 1.48 cents following a dip in the US dollar index. |
| Earnings Update | Significant decline in profits for securities firms amid volatile March trading. |
| Strategic Mergers | Anson Biotechnology plans a merger to expand capital base significantly. |
Afterwards...
Looking ahead, market participants will need to monitor potential shifts in global financial policies, especially those surrounding interest rates and international trade agreements.
As technology and biotech sectors continue to expand, they present significant opportunities for long-term growth. Advancements in semiconductor manufacturing, alongside strategic mergers and acquisitions, could reshape regional financial landscapes, offering new avenues for investors and businesses to explore in the evolving economic climate.