TSMC shares breach NT$300 boosting index by over 100 points

11/04/2019 12:40 PM
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Taipei, Nov. 4 (CNA) Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) continued to rise Monday morning, clearing the nearest technical resistance point of NT$300.00 (US$9.87) as investors remained upbeat about the company's lead in the development of new technology, dealers said.

The stock saw strong buying on optimism toward TSMC's development of high-end technology processes, which is expected to strengthen its profitability next year, they said.

The interest in TSMC stocks also spread to other tech heavyweights, such as iPhone assembler Hon Hai Precision Industry Co., pushing up the main board by more than 100 points and past 11,500 points in the morning session, dealers said.

As of 11:37 a.m., shares of TSMC had climbed 2.51 percent to NT$306.50, with 27.99 million shares changing hands on the Taiwan Stock Exchange (Taiex). The benchmark weighted index was up 134.11 points, or 1.18 percent, at 11,533.64.

TSMC's gains contributed about a 70 point increase to the index and boosted the bellwether electronics sector by 1.72 percent.

Soon after the local equity market opened, TSMC shares attracted strong buying and soared past the NT$300 mark, driving up the broader market as the stock continued to gain, dealers said.

With the strong showing in the morning session, TSMC's market capitalization had risen to NT$7.95 trillion as of 11:37 a.m. from NT$7.75 trillion at the close of trade Friday.

"As foreign investors continue to move funds into the region, they are parking their money in large-cap stocks in the local equity market," MasterLink Securities Tom Tang said.

"TSMC, the world's largest contract chipmaker, is one of their favorite stocks, since it is out front with the development of high-end processes such as 7 nanometer, 5nm and 3nm technology, ahead of Samsung Electronics Co. of South Korea and other major rivals," Tang said.

In the past 11 trading session, foreign institutional investors registered a net buy of 81.508 million TSMC shares. As of Friday, foreign institutional investors held a net 78.55 percent stake in TSMC.

Tang said TSMC's strong research and development and increased investment in expanding production capacity will help boost its growth in 2020.

"TSMC shares are expected to continue to move higher ahead of the next technical resistance at around NT$310.00," he said.

At an investor conference in mid-October, TSMC said it had raised its 2019 capital expenditure by US$4 billion to between US$14 billion and US$15 billion, a record high, to develop high-end processes such as the 7 nanometer and 5nm technologies.

On Saturday, TSMC founder Morris Chang (張忠謀) said at the company's sports day that it holds more than a 50 percent share of the global pure foundry market and is well-positioned to grow, as foreign buyers want a stable supplier.

Mark Liu (劉德音), who succeeded Chang as TSMC chairman in June 2018, said the company expects its 2019 sales to be slightly higher than last year's, while overall sales for the global semiconductor industry as a whole are forecast to fall 12 percent.

On the local main board Monday, other large cap stocks also gained, helping to push up the index.

Among them, Hon Hai, the second largest stock in terms of market cap in the local equity market, was up 4.13 percent at NT$88.30, and integrated circuit designer MediaTek Inc. had climbed 1.11 percent to NT$409.50 as of 11:37 a.m.

(By Chung Jung-feng and Frances Huang)


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