Widening Rate Gap and Foreign Selling Pressure Stocks and Currency in Sync
Rising US inflation concerns have sharply increased market expectations that the Federal Reserve will raise rates again before year-end, while the domestic central bank has held rates steady for 10 consecutive times, set to further widen the Taiwan-US rate gap. As Taiwan AI stocks followed US AI stocks into a valuation correction, foreign investors net sold Taiwan stocks for 10 consecutive trading days from October 6 to 20, totaling 8380.65億元, turned to net buying of 22.39億元 on the 21st, and net sold 816.57億元 again on the 22nd, with cumulative net selling reaching 2.2兆元 from the start of the year to October 22. Foreign investors withdrew funds and remitted large amounts abroad, causing simultaneous pressure on stocks and the currency.
NT Dollar Falls for 7 Straight Sessions, 33 Level Tested
The NT dollar against the US dollar depreciated for 7 consecutive trading days from October 12 to 20, touching 32.714 on the 20th, stopped falling and rebounded by 0.225 on the 21st, then fell again to 32.53 on the 22nd. The 理周投研部 noted that 33 is not only a psychological and substantive defense line the central bank is striving to defend, but also concerns its ability to control imported inflation. The market view is that the NT dollar continues to weaken, with the 32.8 and 33 defense lines under severe test. Once breached, the central bank is bound to step up intervention, including adjusting interest rate policy, and the market needs to be警惕 risks of tightening capital liquidity.
Export Orders Hit Record High, Dollar-Revenue Groups Benefit
Data from the 經濟部統計處 showed September export orders reached 1142億美元, up 62.4 year-on-year, exceeding 1000億美元 for 2 consecutive months and continuing to hit a record high, with cumulative orders of 8192億美元 in the first 9 months of the year, up 56 year-on-year, of which electronics and information and communications products together exceeded 七成五. Domestic exports are mostly denominated in US dollars. For every 1 depreciation of the NT dollar against the US dollar, large electronics exporters can on average lift gross profit margin by 0.3 to 0.5 and gain foreign exchange conversion benefits. Taking 台積電 as an example, with a global market share of 53, its second-quarter foreign exchange conversion net profit reached 83.15億元, accounting for 1.18 of after-tax net profit for the quarter, with first-quarter and third-quarter shares at 1.08 and 0.72 respectively.
Institutions Name 6 Stocks, Focus on Pass-Through Ability
Institutions use a dollar-revenue share of over 六成 as the threshold for beneficiaries: AI server assembly at 85 to 95, semiconductor wafer foundry and packaging/testing at 80 to 90, key electronic components CPO cooling and ASIC at 75 to 85, and traditional export-oriented machine tools and automotive components at 60 to 80. Recommended large-cap export stocks are 台積電, 鴻海 and 廣達, with dollar-revenue shares in the 85 to 90 range, while highly elastic small- and mid-caps recommended are cooling component 奇鋐, silicon photonics 聯亞 and ASIC 世芯-KY. Institutions stress the need to comprehensively consider dollar-revenue share, export net gross margin ratio and price pass-through ability. If depreciation is too rapid it will push up imported raw material costs, erode domestic-demand corporate profits, and attention must be paid to North American cloud giants' capital expenditure and changes in high-level margin balances.