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ASE shares up on Q3 sales report, but gains capped

ASE shares up on Q3 sales report, but gains capped

Taipei, Oct. 9 (CNA) Shares of Taiwan-based Advanced Semiconductor Engineering Inc. (ASE), the world's largest integrated circuit packaging and testing services provider, moved higher Thursday morning after the company reported a record high in sales for the third quarter, dealers said. The gains were limited, however, amid fears that foreign institutional investors will continue to cut their holdings in local blue chips, like ASE, to move their funds to U.S. dollar assets, the dealers said, adding that a fall in ASE's American depositary receipts (ADRs) on Wall Street overnight also capped the upturn of the stock in the local bourse. As of 11:00 a.m., shares of ASE had added 2.16 percent to NT$37.90 (US$1.25), off an early high of NT$38.30, with 14.12 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.21 percent at 8,973.60 points. "To my knowledge, ASE's lead over its peers has helped it secure large orders from Apple, Inc. The third-quarter sales data reflects the benefits resulting from orders for production of Apple's two new iPhones," MasterLink Securities analyst Tom Tang said. "As the new iPhones -- the 4.7-inch iPhone 6 and the 5.5-inch iPhone 6 Plus -- went on sale in mid-September, the rising popularity of the smartphone could continue to boost ASE's shipments in the fourth quarter," he said. In a statement released a day earlier, ASE said it posted NT$66.63 billion in consolidated sales for the July-September period, a quarterly record high, up 13.7 percent from the second quarter and also up 17.4 percent from a year earlier. In terms of its IC packaging and testing operations, revenue for the third quarter rose 7.5 percent from a quarter earlier to NT$42.21 billion, also a quarterly record high. The third-quarter figure also grew 11.6 percent from a year earlier. In September alone, ASE's consolidated sales hit a monthly record high of NT$25.65 billion, up 22.5 percent from a month earlier and also up 25.8 percent from a year earlier. In addition to the orders from Apple, ASE rode the wave of rising demand for chips used in base stations in 4G LTE telecom services networks, while chips used in computers, automotive applications and other consumer electronic devices also boosted shipments of ASE's high-tech IC packaging and testing services, in particular its system-in-package technology, in the third quarter. "It was no surprise that ASE shares attracted buying soon after the local bourse opened. But it seemed that the upturn was limited as optimism toward a strong showing in the third quarter has been pretty much reflected in its share price in recent sessions," Tang said. "More important, many investors are afraid that foreign institutional investors will continue to sell market heavyweights, including ASE, at a time when they are buying into U.S. dollar assets, betting on a higher greenback," Tang said. ASE's ADRs closed down 0.48 percent on Wall Street overnight as foreign investors failed to respond positively to the company's Q3 sales report. On Wednesday, foreign institutional investors served as net sellers of 3.72 million ASE shares. (By Jalen Chung and Frances Huang)


Updated : 2021-07-24 17:05 GMT+08:00