Odd lots trade of TSMC shares soars despite price plunge

Taipei, July 27 (CNA) Odd lots trade of shares of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) surged on Friday, although the stock faced headwinds, tumbling over 5 percent in the session, according to the Taiwan Stock Exchange (TWSE).

The volume of odd lots trade of TSMC shares totaled about 9.84 million shares on Friday, up sharply by almost 400 percent from Tuesday, in a session before the local stock market closed due to a typhoon during Wednesday and Thursday.

Odd lots trade aims to make it easier for retail investors to buy high-priced stocks in quantities of less than 1,000 shares.

On Friday, TSMC, the most heavily weighted stock in the local market, shed 5.62 percent to close at NT$924 (US$28.17), but traded above the nearest technical support at around the 60-day moving average of NT$910.00.

The heavy losses cut TSMC's market capitalization by more than NT$1.42 trillion in one single session to NT$23.96 trillion.

Led by TSMC, the Taiex, benchmark weighted index on the TWSE, ended down 752.63 points, or 3.29 percent, at 22,119.21 as the stock's loss contributed about 447 points to the index's fall amid volatility among tech stocks on the U.S. markets.

According to the TWSE, foreign institutional investors sold a net NT$84.42 billion worth of shares on the local main board on Friday.

In a sharp contrast to the plunge in TSMC shares on massive foreign institutional selling, retail investors showed strong interest in the stock through odd lots trade.

According to the TWSE, the volume of odd lots trade of TSMC shares on Friday is the sixth highest in the chipmaker's history since its listing on Sept. 5, 1994.

The value of odd lots trade of TSMC shares on Friday totaled NT$9.12 billion, the second highest for the chipmaker, the TWSE data showed.

Market analysts said the strong buying from retail investors indicated optimism toward TSMC's business outlook so that they were willing to buy on the dip, and odd lots trade provided them a good trading platform to own the stock.

MasterLink Securities analyst Tom Tang said TSMC was forecast to rake in NT$41.63 in earnings per share in 2024, and if the stock were to fall to NT$900, it would be trading at an "attractive" price to earnings multiple of around 21.

As for iPhone assembler Hon Hai Precision Industry Co., also known as Foxconn on the global markets, odd lots trade of its shares for Friday also soared 183 percent from Tuesday to about 3.16 million shares, the seventh highest for the company's history since a listing on the main board on June 18, 1991.

The value of odd lots trade of Hon Hai, second to TSMC in terms of market value, totaled about NT$609 million on Friday, the fifth largest for the world's largest contract electronics maker.

The strong buying by retail investors also showed they were willing to pick up bargains after Hon Hai shares tumbled 4.71 percent to end at NT$192.00, which wiped out its market cap by NT$131.7 billion to NT$2.66 trillion.

Taiwan lifted a ban on odd lots trade during regular trading hours in October 2020 in a bid to attract more retail investors.

Stocks in Taiwan are usually bought or sold in lots of 1,000 shares. Before the ban was lifted, odd lots could only be traded after regular trading hours by submitting orders from 1:40 p.m. to 2:30 p.m. and having a call auction mechanism match the orders after 2:30 p.m.

After regular trading hours on Friday, the value of odd lots trade of TSMC shares hit NT$84.38 million, the largest among the listed companies on the local stock market, according to the TWSE.