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Taiwan shares end at new high as TSMC posts solid gains

04/02/2024 06:55 PM
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CNA photo April 2, 2024
CNA photo April 2, 2024

Taipei, April 2 (CNA) Shares in Taiwan closed at a new high Tuesday on the back of strong buying led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) after a 4 percent surge in the company's American depositary receipts (ADRs) on the U.S. markets overnight, dealers said.

Other tech heavyweights such as iPhone assembler Hon Hai Precision Industry Co. and contract electronics maker Quanta Computer Inc. also steamed ahead to fuel momentum on the broader market amid optimism toward their efforts in artificial intelligence development, dealers added.

The Taiex, the Taiwan Stock Exchange's (TWSE) weighted index, ended up 244.24 points, or 1.21 percent, at the day's high of 20,466.57 after coming off a low of 20,359.81. Turnover totaled NT$406.75 billion (US$12.68 billion).

The market opened up 0.68 percent as investors took cues from TSMC's high-flying ADRs on Monday, along with other large-cap tech stocks, TSMC continued its strength into the end of the session, pushing up the Taiex to hit a fresh high, overtaking the previous closing high of 20,294.45 recorded on March 29.

TSMC, the local market's most heavily weighted stock, rose 2.60 percent to close at the day's high of NT$790.00. The stock's strong showing contributed about 165 points to the Taiex's increase and boosted the electronics index and semiconductor sub-index by 1.82 percent and 2.12 percent, respectively.

"It was rumored that Warren Buffett rebuilt his position in TSMC, which boosted ADRs overnight," Cathay Futures Consultant analyst Tsai Ming-han said. "But I think it was unlikely."

Tsai said Buffet's Berkshire Hathaway Inc. unloaded its holdings in TSMC's ADRs to zero last year by taking into account tensions across the Taiwan Strait, and such geopolitical concerns remain unchanged so Buffett could repurchase TSMC's ADRs now.

"But it was undeniable that buying in TSMC also reflected the company's sound fundamentals, in particular as AI applications are expected to boost demand for chips made on the company's advanced processes," Tsai said.

In an investor conference held in mid-January, TSMC said it expected its sales will grow 21-26 percent from a year earlier in 2024 in U.S. dollar terms, higher than an expected 20 percent increase in the global pure-play wafer foundry industry.

"So, the next investor conference scheduled for April 18 is worth watching for whether TSMC will make any change in its guidance for 2024," Tsai said.

Tsai said the AI frenzy spread to other AI-related stocks with Hon Hai, which said sales of AI servers are expected to grow more than 40 percent this year, soaring 5.65 percent to end at NT$159.00. In addition, Quanta Computer Inc., another AI server supplier, gained 5.49 percent to close at NT$298.00.

Tsai said as Hon Hai and Quanta Computer ranked as the second-largest and fourth-largest stocks in terms of market value, their gains also made a great contribution to the Taiex.

Among other AI-related stocks, Wistron Corp., which is also an AI server maker, rose 2.04 percent to end at NT$125.00, and LITE-ON Technology Corp., a maker of power management solutions for AI server use, gained 4.00 percent to close at NT$104.00, while Wistron's cloud application subsidiary, Wiwynn Corp, fell 2.40 percent to end at NT$2,240.00.

Also in the electronics sector, smartphone IC designer MediaTek Inc. rose 0.43 percent to close at NT$1,165.00, and IC packaging and testing services provider ASE Technology Holding Co. ended up 2.33 percent at NT$153.50.

"As tech stocks gathered steam to attract most of the buying on the broader market, old economy and financial stocks were squeezed throughout the trading session," Tsai said.

After gaining 2.31 percent in the previous session amid an increase in international crude oil prices, the petrochemical sector lost 0.21 percent with Formosa Plastics Corp. down 0.14 percent to close at NT$70.80, and Nan Ya Plastics Corp. down 0.17 percent to end at NT$57.40.

Elsewhere in the old economy sector, textile maker Far Eastern New Century Corp. dropped 0.30 percent to close at NT$33.15, while Eclat Textile Co. gained 1.10 percent to end at NT$549.00.

In addition, food brand Uni-President Enterprises Corp. lost 1.31 percent to close at NT$75.50, and cooking oil supplier Great Wall Enterprise Co. ended 0.69 percent to end at NT$57.80.

Select stocks in the electric machinery sector, which rose 0.65 percent, attracted buying with Fortune Electric Co. soaring 7.03 percent to close at NT$792.00, and Chung-Hsin Electric & Machinery Corp. rising 0.56 percent to end at NT$178.50 on hopes that they will benefit from massive investments by Taiwan Power Co. to strengthen the country's electricity grid networks.

In the financial sector, which edged down by 0.07 percent, Yuanta Financial Holding Co. rose 0.66 percent to close at NT$30.30, while Fubon Financial Holding Co. and Cathay Financial Holding Co. ended unchanged at NT$69.50 and NT$48.95, respectively.

According to the TWSE, foreign institutional investors bought a net NT$7.11 billion worth of shares on the main board Tuesday.

(By Chang Chieh-chung and Frances Huang)

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