Taiwan Weekly Kickstart TAIEX closed down 1 (ex TSMC 5 ) after Friday’s 8 rebound

Portfolio Strategy Research 1 August 2026 | 2:35AM HKT

TAIEX closed down 1% (ex-TSMC: -5%) after Friday’s 8% rebound; QFIIs continued to heavily sell Tech while buying non-Tech; retail margin reduction continued despite further material ETF inflows

Performance: TAIEX/MSCI -1.2%/+0.3% underperforming Macro Data (Jun): Q2 GDP +12.9% yoy (vs. Cons 10.5%, Alvin So, CFA | MXAPJ by 2.2pp. Banks (+5%), TSMC (+3%) and Insurance Q1 +14.6%), driven by investment Goldman Sachs (Asia) L.L.C.

(+3%) led, while Energy (-18%), Chemicals (-9%), Tech Timothy Moe, CFA Upcoming Data: S&P Manu. PMI (Mon) | Hardware & other Semis (-7%) lagged (Exhibit 11) Goldman Sachs (Singapore) Pte

Kinger Lau, CFA Flows: QFIIs net sold US$2.6bn of cash equities, mostly in Charts of the Week: LETFs and Retail Margins | Goldman Sachs (Asia) L.L.C. Tech (TSMC -US$1.2bn, others -US$2.8bn), while net bought Leverage ETFs: Taiwan leveraged ETF AUM has reached Sunil Koul non-Tech (US$1.8bn) and maintained similar net short US$13bn, driven by strong YTD inflows of US$8bn, | Goldman Sachs International futures positions (Exhibit 14). Local funds net bought including US$4.5bn during the recent market correction; US$1.6bn across all sectors (Exhibit 15). Retail investors net this has potentially increased market volatility. Compared sold non-tech and futures, alongside lower margin ratios with Korea, where leveraged ETF AUM stands at US$24bn, (Exhibit 21). Short interest ratios were largely stable Taiwan’s LETF rebalancing flows remain more moderate; a (Exhibit 25). ETFs recorded US$4.9bn of inflows, including 5% daily move could potentially drive US$1.8bn of leveraged (+US$750mn), active (+US$800mn), same-direction dealer hedging flows, equivalent to ~6% of broad-market (+US$3.1bn), and dividend products Taiwan daily turnover. (+US$300mn) (Exhibit 30). Retail Margins: Taiwan margin loans have declined 13% EPS Revisions: Consensus 2027E EPS is up 1.1%, with most from the peak to US$13bn, while long margin holding value +ve revisions in Info Tech and Industrials (Exhibit 49) stands at around US$21bn, equivalent to only 0.6% of market free float, suggesting the market-wide impact Valuations: f12m/24m PE at 19.1/14.9x (+1.7/+0.8 s.d.) remains manageable. Maintenance margin levels briefly TSMC ADR Premium: Down to 8% (-3pp); Reversal index declined below 145% at the trough, which was close to GSSRTSMR is at -0.6 (potential rebound, Exhibit 50) triggering a broader-based margin unwind before the strong market recovery on Friday. Cross-Strait Risk: GSSRCSRI down to 83 (#)

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Goldman Sachs Taiwan Weekly Kickstart

Charts of the Week: Leveraged ETFs and Retail Margins 3

Charts of the Week: 2Q26 Earnings Season Review 4

Taiwan Market/Sector Summary & Scorecard 5

Regional Fund Flows and Positioning 19

TSMC ADR Premium Reversal Index (GSSRTSMR) 22

Equity and Policy Risk Indicators 23

Monthly Sales Tracker (June 2026) 25