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Fubon Securities: Taiwan Stocks Need Further Margin Deleveraging, Q4 Target Set at 40k-50k
Electronic Technology · Semiconductors · economic_daily · 2026-11-05
Fubon Securities warns that Taiwan's stock market needs to shed another 60 billion TWD in margin debt, but maintains a positive outlook for Q4 with a target range of 40,000 to 50,000 points.
What Happened
Margin Pressure Persists: Taiwan stocks have faced significant volatility, falling below the 42,000-point mark. Fubon Securities General Manager Chen Yung-chun notes that while the index has corrected by 17%, margin debt has only decreased by less than 11%, suggesting that further deleveraging of 50 to 60 billion TWD is necessary to stabilize the market.
Strong Fundamental Outlook: Despite short-term headwinds from global markets, the outlook for Taiwan's AI supply chain remains robust with strong order visibility. Corporate earnings are projected to reach 7.9 trillion TWD this year and potentially 9.8 trillion TWD next year, with current valuations at a P/E ratio of 15x, below historical averages.
Q4 Market Forecast: Fubon Securities projects the index will trade between 40,000 and 50,000 points in the fourth quarter. The 40,000-point level is identified as a critical support zone, and while a rapid rebound is unlikely, the firm advises investors to avoid excessive pessimism and consider buying on dips.
Sector Strategy: Financial stocks are expected to lead a potential market rebound, according to Fubon's analysis. Meanwhile, the petrochemical sector remains a watch item, with performance contingent on international oil prices and product spreads, suggesting a selective approach to portfolio allocation.