TSMC returns to prior ex-dividend level within 27 minutes after opening

Taipei, Sept. 16 (CNA) Shares of Taiwan Semiconductor Manufacturing Co. (TSMC) returned to their prior ex-dividend level within 27 minutes of the local market opening Wednesday, the stock's ex-dividend date.

Shares of the world's largest contract chipmaker, which accounts for over 40 percent of total market value, opened NT$5.00 (US$0.16) lower from a reference price of NT$3,380.00 after its American depositary receipts (ADRs) fell 1.02 percent overnight in the U.S.

Buying soon emerged, however, pushing the stock to NT$2,385.00 within about 27 minutes and back to its prior ex-dividend level.

The quick recovery indicated investor confidence in the outlook for TSMC, a major beneficiary of the current artificial intelligence (AI) boom, despite lingering investor concern about the possibility of a rate hike by the U.S. Fed, dealers said.

For companies in Taiwan that issue cash dividends annually, the ex-dividend date is the first day a stock trades without entitlement to the latest dividend, with its reference price adjusted accordingly.

TSMC began paying cash dividends quarterly rather than annually in 2019.

After going ex-dividend Wednesday, TSMC is scheduled to pay a cash dividend of NT$7 per share based on its earnings in the first quarter, when earnings per share stood at NT$22.08.

Since TSMC began paying quarterly cash dividends, its shares have returned to their prior ex-dividend level on the ex-dividend date 23 times, indicating strong investor confidence in the company's fundamentals and willingness to hold them.

The NT$7 first-quarter cash dividend per share was higher than the NT$6 paid for the fourth quarter of last year. The first-quarter dividend will be paid Oct. 8.

TSMC Chairman C.C. Wei (魏哲家), who held 7.45 million TSMC shares as of the end of August, is expected to receive NT$52.16 million in dividends in October, while the Executive Yuan's National Development Fund, TSMC's largest shareholder with 1.65 billion shares, is expected to receive NT$11.58 billion.