Wed, Jul 14, 2004 - Page 10 News List

Government may retain TSMC shares

BLOOMBERG

The government's Development Fund may not sell its shares in Taiwan Semiconductor Manufactur-ing Co (TSMC, 台積電) next year in order to help maintain a stable stock price, a senior fund official said.

The Cabinet is expected to submit its budget bill for next year to the legislature in September, outlining its stock sale plans for TSMC shares, according to James Ho, deputy executive secretary with the Development Fund, which owns a 7.4 percent stake in the company. TSMC is the world's largest producer of made-to-order chips.

"We have a preliminary plan and have communicated with TSMC. We all have an understanding," Ho said.

The Cabinet plans to sell NT$180 billion (US$5.3 billion) worth of its stock holdings in the second half of the year, including shares in TSMC and Chunghwa Telecom Co (中華電信), Taiwan's largest phone company.

"This should be seen as positive as it will not add to the supply of Taiwan Semiconductor shares next year," said Winnie Tiao (刁明華), chief investment officer at HSBC Asset Management Taiwan. "Most importantly, we'll have to see how good TSMC's fundamentals are."

TSMC shares lost 1.3 percent to close at NT$44.20 on the TAIEX. Shares of Chunghwa Telecom fell 1.9 percent, to NT$52.50.

For years, the government has been identifying assets it wants to sell to ease budget deficits. The gap between spending and revenue this year is expected to climb to NT$257 billion.

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