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TSMC market cap hits high

TSMC market cap hits high

Taipei, Feb. 11 (CNA) The market capitalization of Taiwan Semiconductor Manufacturing Co. (TSMC, ???) hit a fresh high Wednesday morning after the world's largest pure wafer foundry operator proposed a better-than-expected cash dividend, dealers said. Buying in TSMC shares also reflected optimism toward the chip maker's bottom line after the company reported a new high in sales for January, which defied the conventional wisdom that the first quarter is a slow season for the global semiconductor sector, they said. The strength of TSMC, the most heavily weighted stock in the local market, boosted the broader market, helping the index climb from the doldrums seen a session earlier, they added. As of 11:13 a.m., shares of TSMC had added 3.86 percent to NT$148.00 (US$4.70) with 41.5 million shares changing hands. Led by the TSMC's gains, the electronics sub-index was up 1.37 percent at 378.92, while the weighted index on the Taiwan Stock Exchange (TWSE) was up 0.86 percent at 9,474.03. Due to the higher share price, TSMC's market capitalization reached a new high of NT$3.85 trillion. "Judging from the current buying, I suspect that foreign institutional investors stayed on the buy side because foreign investors who are the majority shareholders of TSMC will be the major beneficiaries of the proposed cash dividend for 2014," MasterLink Securities analyst Tom Tang said. "The gains posted by TSMC's American depositary receipts (ADRs) overnight indicated that foreign investors hailed the proposed cash dividend," Tang said. The stock's ADRs rose 5.25 percent on Wall Street. According to the TWSE, foreign institutional investors owned 77.86 percent of TSMC's outstanding shares as of Tuesday. In a board meeting, TSMC proposed to issue a cash dividend of NT$4.5 for 2014 after it posted a record high of NT$10.18 in earnings per share. The proposed dividend represented a payout ratio of 44.2 percent, and beat a previous market expectations of a NT$4 cash dividend. TSMC will seek final approval for the proposed cash dividend at its annual shareholders meeting scheduled for June 9. "In addition to the higher-than-expected cash dividend, many investors appeared happy with TSMC's January sales report. It surprised the market because it was not affected by the normally slow first quarter," Tang said.
TSMC posted consolidated sale of NT$87.12 billion in January, up 25.3 percent from a month earlier and 69.4 percent from a year earlier. The January figure beat the company's previous single-month sales record of NT$80.74 billion in October 2014. "Although TSMC's February sales are likely to fall from January due to the reduced number of working days and sales in March could remain slow due to slow season effects, the chip maker will not have any problems hitting its first quarter target," Tang said. At an investor conference held in mid-January, TSMC said it expected its first quarter sales could stay little changed from NT$$222.52 billion recorded in the previous quarter, beating a previous market forecast of a 3-5 percent sequential drop. "TSMC is a fundamentally sound company. As long as foreign institutional investors continue to buy into the stock, the broader market is expected to move higher, like today's market movement," Tang said. (By Jackson Chang and Frances Huang)


Updated : 2021-09-19 07:52 GMT+08:00