Wed, May 03, 2017 - Page 11 News List

TSMC shares gain 1.03% amid tech buying in US

NASDAQ’s INFLUENCE:Ta Ching Securities’ Andy Hsu said that buying in TSMC was sparked by strength in its depositary receipts in the US, which gained 1 percent

CNA, with staff writer

The market capitalization of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday hit a record high for the nation and the stock market on a strong showing in tech stocks in the US overnight.

At the close yesterday, shares of TSMC, the world’s largest pure wafer foundry operator, had gained 1.03 percent to NT$196.50, off an early high of NT$199.00, with 45.85 million shares changing hands.

At the stock’s high point, TSMC’s market capitalization reached NT$5.16 trillion (US$171.6 billion), breaking its own record for any company ever listed on the Taiwan stock exchange.

TSMC’s strong showing largely resulted from foreign institutional buying as foreign investors rushed to move funds into the market, which also pushed the New Taiwan dollar through the NT$30 barrier against the greenback, dealers said.

Despite some selling to cap TSMC’s gains, the stock’s price was still above its record closing high of NT$195, seen on March 21.

Led by TSMC’s gains and the entire bellwether electronics sector, the main board stood above the 9,900-point level, with the weighted index hitting 9,941.27, up 0.70 percent at yesterday’s close.

The electronics sub-index was up 0.75 percent at 411.44.

“Investors here were largely encouraged by the all-time high hit by the tech-heavy NASDAQ index overnight, and they scrambled to pick up large-cap stocks, like TSMC, soon after the local market opened today,” Ta Ching Securities (大慶證券) analyst Andy Hsu (許博傑) said.

Hsu said buying in TSMC was also sparked by the strength of its US depositary receipts, which gained 1 percent on Wall Street overnight.

The analyst said that investors are aware that TSMC, as well as the entire semiconductor industry, will be affected by the traditionally slow second quarter, but expect the contract chipmaker to bounce back in the third quarter as the industry’s peak season approaches.

“Those expectations have not changed at all,” Hsu said. “The buying reflected strong liquidity in the local market as foreign investors continued to remit funds into the region instead of any change in fundamentals. The gains were largely liquidity driven, and foreign institutional investors were buyers.”

TSMC said at an investors’ conference in the middle of last month that the company would benefit in the third quarter from an increase in shipments of chips made with the advanced 10 nanometer process and a recovery in global smartphone demand.

However, the chipmaker said that its consolidated sales for the second quarter could fall 8 to 9 percent from the first quarter to range between NT$213 billion and NT$216 billion.

“Judging from the movement of TSMC shares today, I think the stock will face stiff technical resistance at around NT$200,” Hsu said.

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