TSMC shares return to prior ex-dividend level soon after market opens

Taipei, March 18 (CNA) Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) returned to their prior ex-dividend level on Monday, driving a technical rebound on the wider local market.

As of 10:16 a.m., shares of TSMC, the local market's most heavily weighted stock, had risen NT$10.00 (US$0.32) or 1.33 percent to NT$760.00 after plunging NT$31.00 or 3.95 percent on Friday.

The Taiex, the Taiwan Stock Exchange's weighted benchmark index, meanwhile, had gained 76.02 points, or 0.39 percent, to hit 19,758.52 points.

TSMC's gains contributed around 80 points to the Taiex's rise, and sent the electronics index and the semiconductor subindex up by 0.61 percent and 0.90 percent, respectively, as of 10:16 a.m.

For companies in Taiwan that issue cash dividends annually, the ex-dividend date is the date on which a stock begins trading after the cash dividend to be paid out on the previous year's earnings has been deducted.

TSMC, which started to issue cash dividends quarterly instead of annually in 2019, saw its opening reference price cut by NT$3.50 from its previous close of NT$753.00 to begin Monday's session at NT$754.00. Its strength continued.

The contract chipmaker is scheduled to issue about NT$3.5 in cash dividend per share in April for its earnings per share of NT$8.14 raked in the third quarter of last year after Monday's ex-dividend date.

Stocks, like TSMC, can return to their prior ex-dividend levels, indicating investors have faith in their fundamentals and are willing to hold onto them, although their share prices are cut by the amount of cash dividend per share they will pay.

At an investor conference held in mid-January, TSMC gave guidance for this year, saying that due to the company's lead over its rivals in advanced technology development, the chipmaker is expected to enjoy a year-over-year sales increase of 21-26 percent in 2024, higher than an expected 20 percent increase in the global pure-play wafer foundry industry.

Since TSMC started to issue cash dividends every quarter, its shares have successfully returned to their prior ex-dividend levels during the same-day session of the ex-dividend date for 13 rounds out of the total 18.

On April 11, TSMC will issue NT$90.76 billion in total cash dividends. Market analysts said the dividend payout will inject a large amount of funds into the stock market, and the payout encourages investors to invest more.

TSMC Chairman Mark Liu (劉德音), who holds 12.91 million TSMC shares, is expected to receive NT$45.18 million in cash dividends in April, while CEO C.C. Wei (魏哲家), who has 6.39 million TSMC shares, is expected to pocket NT$22.36 million.

The National Development Fund under the Executive Yuan, TSMC's largest shareholder with 1.65 billion shares, is expected to receive NT$5.79 billion.

TSMC has said it will pay no less than NT$3.5 in cash dividend per share a quarter to allow its shareholders to share the benefits from its growing bottom line.