Countdown to MSCI Rebalancing: Nanya Technology Soars to Record NT$555 as Foreign Investors Snap Up 140,000 Shares in August, Fueling the Rally

The MSCI quarterly rebalancing has entered its final countdown, and capital flows into the memory sector are heating up across the board. Nanya Technology (2408.TW) hit another all-time intraday high of NT$555 on August 27, while Winbond Electronics (2344.TW) and Phison Electronics (8299.TW) also strengthened in tandem. With the new MSCI constituents set to take effect after the market close on August 31, institutional capital movements have become the market’s focal point.

MSCI Inc. announced its third-quarter index review results on August 13, with Taiwan seeing “6 additions and 6 deletions” in the Global Standard Index. Among the additions, three memory-sector bellwethers—Nanya Technology, Winbond Electronics, and Phison Electronics—were simultaneously included as constituents. Furthermore, Taiwan has now become the largest-weighted market in the MSCI Emerging Markets Index following this quarter’s adjustment, further underscoring the Taiwanese stock market’s standing in global capital markets.

The constituent-inclusion effect was first reflected in share prices. Nanya Technology closed lower at NT$482.5 on August 12. After MSCI announced the adjustment results, the stock briefly hit its daily limit the following session, surging to NT$530, and has since continued to climb amid volatility. On August 27, it reached an intraday record high of NT$555, representing a gain of NT$72.5, or approximately 15%, from the August 12 close. Winbond Electronics also trended upward over the same period.

Institutional positioning has been a major driver of Nanya Technology’s rally. Since August, the three major institutional investors have bought a combined 152,900 lots of Nanya Technology, with foreign investors alone purchasing 144,100 lots. Winbond Electronics saw combined institutional buying of 60,900 lots, including a substantial 105,900 lots from foreign investors; although investment trusts sold 46,300 lots, overall positioning remained bullish. By contrast, Phison Electronics saw the three major institutional investors sell a net 3,127 lots since August.

On August 27 alone, Nanya Technology topped the list of foreign investors’ top ten net buys with 30,133 lots, followed closely by Winbond Electronics with 30,131 lots. Investment trusts and proprietary traders were also on the buy side, with the three major institutional investors buying a combined 33,000 lots of Nanya Technology. With concentrated institutional capital inflows, Nanya Technology closed up 4.64% at NT$541, a record closing high, on volume of 86,100 lots.

Fundamentals are also providing support for Nanya Technology’s continued strength. The company has raised its capital expenditure to NT$69.7 billion (approximately $2.2 billion) this year, with plans to significantly increase it to NT$200 billion (approximately $6.3 billion) next year as it aggressively expands capacity. At the same time, it has raised its long-term contract ratio to 50%, covering agreements ranging from single-quarter to multi-year terms, with customers including Nvidia, Google, Microsoft, Intel, and AMD—major global technology players—thereby reducing the impact of price volatility on operations.

Memory Shortage Boom Spreads to Parent Company Nan Ya Plastics, Which Hits Daily Limit

The memory shortage boom has also spread to the group’s parent company. Nan Ya Plastics (1303.TW), benefiting from the ongoing AI wave that has driven robust demand for materials such as fiberglass cloth and CCL, along with the surge in its investee Nanya Technology’s share price to record highs amid the memory shortage, saw its stock quickly hit the daily limit of NT$227.5 on August 27, up NT$20.5, with volume reaching 144,368 lots.

Winbond Electronics, benefiting from memory demand, has continued to climb recently, briefly touching the NT$190 level on August 27 before pulling back to close at NT$186, up NT$4.5 or 2.48%, on volume of 137,314 lots.

The top five stocks by post-market trading volume on August 27 were:

Note: Volume figures are based on post-market statistics for listed and OTC stocks on the day.

As Effective Date Approaches, Expectations for Index-Tracking Fund Adjustments Heat Up

This MSCI adjustment will take effect after the market close on August 31. As the effective date approaches, expectations for adjustments by index-tracking funds are rising. Trading volumes, share price movements, and institutional positioning changes in Nanya Technology, Winbond Electronics, and Phison Electronics will all be key market observation points.

In particular, Nanya Technology has already set an all-time high of NT$555. Whether it can absorb overhead resistance will be critical to the sustainability of the memory rally. Institutional analysts note that passive index funds typically adjust positions around the effective date, which may cause increased short-term share price volatility, but the medium-to-long-term outlook will ultimately revert to fundamentals.

Looking at the broader market, the Taiwan Stock Exchange opened higher on August 27, surging as much as 569 points intraday to breach the 46,000-point mark. However, dragged down by heavyweight stocks such as Taiwan Semiconductor Manufacturing (2330.TW), Elite Material (2383.TW), and MediaTek (2454.TW), the index pared gains to close up 142.6 points, or 0.31%, at 45,975.22, relinquishing the 46,000-point level. Turnover reached NT$924.68 billion (approximately $29.1 billion). Foreign investors continued to buy a net NT$49.09 billion (approximately $1.5 billion) on the day, with capital concentrated in memory names such as Nanya Technology and Winbond Electronics, signaling that foreign investors are intensifying their bets on a memory sector recovery.