TSMC rally propels Taiwan shares to record high level

Taipei,  Shares in Taiwan closed at a record high Monday on a strong rally by Taiwan Semiconductor Manufacturing Co. (TSMC) and other chipmakers, dealers said.

With buying focused on tech stocks throughout the session, old economy and financial stocks largely stayed in the doldrums as concerns over political tensions and fears over the COVID-19 pandemic still weighed on sentiment, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended up 284.26 points, or 2.31 percent, at 12,588.30, after moving between 12,586.91 and 12,686.36, on turnover of NT$252.40 billion (US$8.59 billion).

The market opened up 2.56 percent as TSMC shares shot up on news that Intel’s 7-nanometer technology development was being postponed, which is expected to divert more orders in TSMC’s direction, dealers said.

That momentum was sustained to the end of the session. Though the market came off its intraday high because of weakness in non-tech stocks, the Taiex still closed at a new high, surpassing the previous high of 12,495.34 seen on Feb. 10, 1990.

Monday’s intraday high was also the highest on record, topping the previous mark of 12,682 on Feb. 12, 1990.

TSMC rose 10 percent, the maximum daily increase, to close at a new high of NT$424.50, with 98.93 million shares changing hands.

The rally raised TSMC’s market capitalization by NT$998.3 billion from a session earlier to a record high of about NT$11 trillion.

“It was, again, a one stock show,” Concord Securities analyst Kerry Huang said, referring to TSMC.

“Without TSMC, the broader market would have fallen below the previous close as 763 stocks fell and only 150 rose,” Huang said.

TSMC alone contributed to a 327-point increase to the Taiex, and boosted the electronics sector and the semiconductor sub-index by 4.76 percent and 8.40 percent, respectively.

Interest in TSMC spread to other semiconductor stocks, with TSMC rival United Microelectronics Corp. also gaining the maximum 10 percent to close at NT$21.70, and integrated circuit designer MediaTek Inc. closing 7.85 percent higher at NT$728.00.

Among the losers on the day, iPhone assembler Hon Hai Precision Industry Co. fell 2.50 percent to close at NT$78.00 as investors remained concerned about potential competition for iPhone orders from China’s Luxshare Precision Industry Co.

“As the TSMC-led electronics sector accounted for about 76 percent of Monday’s total turnover, non-tech stocks generally lost ground because they received less attention from the market,” Huang said.

“TSMC’s gains came for reasons related to Intel but the broader market remained concerned by U.S.-Beijing tensions as well as increasing COVID-19 cases worldwide,” Huang said.

Among the falling large cap old economy stocks, textile brand Far Eastern New Century Corp. shed 6.14 percent to close at NT$26.00, Asia Cement Corp. lost 2.75 percent to end at NT$40.70, and Formosa Plastics Corp. fell 2.01 percent to close at NT$78.10.

In the financial sector, which fell 1.02 percent, Shanghai Commercial & Savings Bank lost 2.41 percent to end at NT$42.50, Mega Financial Holding Co. fell 1.71 percent to close at NT$31.60, and Cathay Financial Holding Co. dropped 0.87 percent to end at NT$39.75.

“The earnings season in Taiwan and on Wall Street is still under way, and investors should keep a close eye on that,” Huang said, adding that Apple Inc. has scheduled an investor conference for Thursday, which could move Taiwanese suppliers.

According to the TWSE, foreign institutional investors bought a net NT$7.24 billion in shares Monday.

 

Source: Focus Taiwan News Channel

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