The cap does the trading
The KRX Semiconductor Index resets a 20 per cent single-stock cap every September, just after futures and options expiry, and the funds tracking it rebalance to match. SK hynix sits at 36.9 per cent and Samsung Electronics at 23.1 per cent, both above that line, and Samsung Securities puts the resulting sale at about 1.7 trillion won. The three tracking ETFs held 7.676 trillion won on the 4th, against 1.054 trillion won a year earlier.[1]
The size of that order is only half the question. Average daily turnover on the KOSPI has fallen from 50.347 trillion won in June to 20.048 trillion won so far this month, so the same won of forced selling meets a much shallower book than it would have met in early summer. Last September's cut to SK hynix, from 29.3 per cent to 21.5 per cent, ran against a pool of tracking money a seventh the size. The price effect this time comes from the depth of that book rather than from any change in what the chips are worth. The alternative is that funds spread orders through the session instead of clustering them at the close, which limits the effect without changing the mechanism.[1]
Taipei's uncapped version
Taiwan ran the same concentration without a ceiling on Monday. The Taiex closed 1.67 per cent higher at 47,326.27, and TSMC, which accounts for more than 40 per cent of the market's total value, rose 2.07 per cent and supplied about 400 points of the index's 775.14-point gain. The KRX Semiconductor Index holds a single name to 20 per cent for exactly that reason, and the cost of the cap is that the adjustment arrives as a dated order instead of accumulating slowly in the weights.[1], [2]
Taipei's move came from demand and expectation. Buying followed a 3.38 per cent rise in the Philadelphia Semiconductor Index at the end of last week, and United Microelectronics reached its 10 per cent daily limit after reporting August sales up 30.71 per cent year on year. Concord Securities analyst Kerry Huang attributed the session to the artificial intelligence boom while noting that August jobs data in the United States had raised worries about a Federal Reserve rate increase. A scheduled index order carries none of that information.[2]
The close on the 10th
The test is narrow and dated. If the rebalancing trades cluster around the closing price on the 10th, with the revised indexes taking effect from the 11th, the signal to watch is whether SK hynix and Samsung Electronics give back part of the move in the final minutes and recover it in the sessions that follow. A price gap that persists past the 11th would say the flow was reading fundamentals after all, and would send this reading back for revision.[1]