The government said it sold 1 percent of Chunghwa Telecom Co (
One million of 100 million shares on offer were sold at an average price of NT$52.01, the Ministry of Transportation and Communications said. The shares closed Taipei trading yesterday at NT$52.50.
The government received 1,229 bids, mostly from retail investors, covering 40.87 million shares. Most of bids were rejected because they were below the government's minimum price of NT$52.
Chunghwa, the nation's dominant phone company, is 82 percent owned by the government, which is trying to sell a 1 percent stake to help raise money to plug a NT$237.4 budget deficit. The government last sold a stake in December, when Fubon Financial Holding Co (
Chunghwa cut jobs and bought back shares to sweeten the share sale. Retail investors, often stuck with bank deposit rates of 2 percent or lower, may be attracted to the 7.7 percent yield from Chunghwa dividends, fund managers said before the sale.
"Chunghwa Telecom is quite attractive to people looking for steady cash returns," said Celine Chiang (
Chunghwa has been a tough sell because the former monopoly faces competition in cellphone and international services. Taiwan is the world's most saturated cellphone market, with 106 phones for every 100 people, according to government figures.
Chunghwa last week said it may introduce an early retirement program to lower costs and a share buyback to boost per-share earnings and dividends.
The company, contending with competition from new fixed-line and mobile-phone operators, may face a profit decline next year.
Net income may drop to NT$41.7 billion on sales of NT$178.27 billion, said Capital Securities Corp (群益證券), which is managing the share sale this week.
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