Taiwan Weekly Kickstart TAIEX rebounded 2 , led by a recovery in Tech, despite a Friday pullback amid escalating US Iran ten...

Portfolio Strategy Research 25 July 2026 | 12:25AM HKT

TAIEX rebounded 2%, led by a recovery in Tech, despite a Friday pullback amid escalating US-Iran tensions; foreign outflows moderated to -US$2.2bn, and retail investors reduced margin loans

Performance: TAIEX/MSCI +2.3%/+2.9%, outperforming Macro Data (Jun): Industrial Production +23% yoy (vs. GSe Alvin So, CFA | MXAPJ by 2.5pp. Energy (+6%), Tech Hardware (+4%), +18%, May +12%); Retail Sales +8% yoy (vs. May +5%); Goldman Sachs (Asia) L.L.C.

Transport and TSMC (+3% each) led, while Materials (-4%), Export Orders +59% (vs. May +47%) Timothy Moe, CFA | Health Care and Autos (down 2-3%) lagged (Exhibit 11) Goldman Sachs (Singapore) Pte Upcoming Data: Consumer Confid. (Tue), Q2 GDP (Fri) Kinger Lau, CFA Flows: QFIIs net sold US$2.2bn of cash equities, mostly in | Goldman Sachs (Asia) L.L.C. Tech (TSMC -US$1.1bn, others -US$1.2bn), while reducing Charts of the Week: LETFs and Retail Margins Sunil Koul short futures positions by a similar amount (Exhibit 14). Leverage ETFs: Taiwan leveraged ETF AUM has reached | Goldman Sachs International Local funds net bought US$2bn across all sectors (Exhibit US$12bn, driven by strong YTD inflows of US$7bn, 15). Retail investors net sold stocks and futures, alongside including US$3.5bn during the recent market correction; lower margin ratios, but continued to buy ETFs (Exhibit 21). this has potentially increased market volatility. Compared Short interest ratios moderated (Exhibit 25). ETFs with Korea, where leveraged ETF AUM stands at US$26bn, recorded US$4.8bn of inflows, including leveraged Taiwan’s LETF rebalancing flows remain more moderate; a (+US$800mn), active (+US$1.1bn), broad-mkt (+US$2.3bn), 5% daily move could potentially drive US$1.2bn of and dividend products (+US$600mn) (Exhibit 30). same-direction dealer hedging flows, equivalent to ~4% of Taiwan daily turnover. EPS Revisions: Consensus 2027E EPS is up 0.9%, with most +ve revisions in Commodities and Tech, vs. -ve revision in Retail Margins: Taiwan margin loans have risen to Transportation and Consumer sectors (Exhibit 49) ~US$15bn, while holding value is ~US$25bn, equivalent to only 0.8% of market free float. Maintenance margin levels Valuations: f12m/24m PE at 19.4x/15.2x (+1.8/+0.9 s.d.) have recently declined below 160% at trough; during the TSMC ADR Premium: Stayed at 12%; Reversal index April-25 US tariff-related risk-off episode, maintenance GSSRTSMR is at +0.1 (relatively neutral, Exhibit 50) margin levels fell below 140%, which triggered a broader-based margin unwind. Cross-Strait Risk: GSSRCSRI down to 85 (Exhibit 53)

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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 5

Taiwan Market/Sector Summary & Scorecard 6

Regional Fund Flows and Positioning 20

TSMC ADR Premium Reversal Index (GSSRTSMR) 23

Equity and Policy Risk Indicators 24

Monthly Sales Tracker (June 2026) 26