While another decline for Chinese equities is grabbing the headlines, it’s worth noting that Korean and Taiwan stocks fell 1.4% and 1%, respectively to start the week:
The catalyst for that certainly appears to be a Morgan Stanley downgrade of Samsung and Taiwan Semi.
Morgan cut its PT on Samsung to 2.18 million won from 2.26 million won citing, among other things, a reversal of NAND flash memory chip prices and reduced visibility on DRAM chips’ supply-demand dynamics. The stock fell 5%:
Foreign investors sold a net 330b won worth of Samsung on Monday and pulled a net 452.4b won ($416m) from the Kospi as of 4:38pm. That would be the biggest exodus of overseas money since August 11, in the immediate aftermath of “fire and fury.”
While this probably isn’t anything to get too worked up over, Bloomberg’s Divya Balji did note the following overnight: “…it’s a very worrying sign for the fragility of the market that one report is causing such widespread pain.”