Foreign investors eye UMC shares’ inferior valuation

Staff writer, with CNA

Tue, Jul 04, 2017 - Page 11

United Microelectronics Corp (UMC, 聯電), the nation’s second-largest contract chipmaker, was the stock that generated the most interest from foreign institutional investors last week, the Taiwan Stock Exchange said yesterday.

According to data compiled by the exchange, foreign institutional investors bought a net 391.18 million UMC shares last week, the most of any stock on the market.

Ranking behind UMC were flat-panel makers AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創), which were the targets of foreign investor net buys of 198.07 million shares and 65.55 million shares respectively.

The aggressive buying pushed UMC shares up 15 percent during the week, while AUO shares rose 8.17 percent and Innolux shares gained 4.26 percent.

The strong foreign institutional interest in UMC largely reflected its relatively low valuation when compared with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker.

Before the strong showing last week, UMC shares had gained 12.28 percent since the beginning of the year, while TSMC, the most heavily weighted stock on the local market, had added almost 20 percent.

Hon Hai Precision Industry Co (鴻海精密) saw the biggest sell-off by foreign institutional investors, who sold a net 45.98 million Hon Hai shares last week, followed by TSMC with 21.60 million shares and Pacific Construction Co (太平洋建設) with 9.28 million shares.

Foreign investors bought a net NT$20.45 billion (US$672 million) of shares during the week, bringing their net buy for the first half of the year to NT$266.27 billion, exchange data showed.

In the first half of the year, the weighted index on the main board rose 1,141 points, or 12.3 percent.