Foreign investors have made an about-face in their Taiwan stock investments this week, thanks to a blowout earnings result from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).
After withdrawing US$4.5 billion from local shares through Thursday on post-election concerns and a pullback in US policy easing bets, global funds rushed back the next day following a solid growth outlook from the chip giant, data compiled by Bloomberg showed. They scooped up US$2.6 billion in equities on Friday.
That boosted foreign investors’ net buying of Taiwanese equities worth NT$80.17 billion (US$2.55 billion) on Friday, marking the second-biggest number on record. The TAIEX ended surging 2.63 percent to 17,681.62.
Photo: REUTERS
While cross-strait relations remain an overhang, particularly after Chinese officials said it might cancel tariff concessions for some Taiwan imports, TSMC’s projections for capital spending and revenue have raised hopes of a broad recovery in the tech sector this year.
“The political risk premia for Taiwan assets is likely to fade as investor interest shifts back to fundamentals,” Invesco Asset Management (景順投信) strategist David Chao said.
The nation’s tech sector “could benefit from a continuation of the increased tech exports we have seen in recent months, which were boosted by artificial intelligence-related products,” he said.
TSMC jumped more than 6 percent in Taiwan to NT$626 after its US depository receipts surged almost 10 percent to close at the highest level since February 2022.
TSMC, the main supplier of chips to Apple Inc and Nvidia Corp, sees a return to solid growth this quarter as it moves ahead with plans for plants in Japan, Arizona and Germany amid growth fueled by the boom in artificial intelligence development. Its earnings spurred the biggest rally for chipmakers in more than a month on Thursday and pushed the Nasdaq 100 index to close at an all-time high.
“The better-than-expected results from TSMC could be positive signals on demand recovery,” Billionfold Asset Management Inc chief executive officer and fund manager An Hyungjin said. “With strong AI demand, not only the US big tech firms but also most tech firms around the world have to invest in AI, and that could be good news to stock markets.”
Shares in Taiwan closed at a new high yesterday, the first trading day of the new year, as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to break records amid an artificial intelligence (AI) boom, dealers said. The TAIEX closed up 386.21 points, or 1.33 percent, at 29,349.81, with turnover totaling NT$648.844 billion (US$20.65 billion). “Judging from a stronger Taiwan dollar against the US dollar, I think foreign institutional investors returned from the holidays and brought funds into the local market,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Foreign investors just rebuilt their positions with TSMC as their top target,
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