Taiwan Semiconductor's stock heads for a record after regulator rewrites rules for local investors
By Barbara Kollmeyer
Solid results from TSMC for the first quarter confirm to many tech investors that momentum in the chip spending cycle is very much intact
Local investors in Taiwan Semiconductor Manufacturing Co. will now be allowed to hold more shares of the AI-chip maker.
Shares of Taiwan Semiconductor Manufacturing Co. surged on Friday after regulators in that country eased up on rules governing how much locals can invest in the maker of artificial-intelligence chips.
U.S.-listed shares of TSMC (TSM) climbed 3.4% to $395.97 per share on Friday, which, if it continues into the regular session's close, will mark a new all-time high. Even bigger gains were seen for local shares (TW:2330), which shot up 5% to NT$2,185, marking a record high based on data going back to 1994, Dow Jones Market Data said.
Investment funds in Taiwan have previously only been allowed to invest 10% of total net asset value in one stock. As of Friday, that level is now 25% if a company's weight is more than 10% of the Taiwan Stock Exchange, according to a change by the country's financial supervisory commission. TSMC dominates the Taiex index TW:Y9999 with a 44% weighting.
Local shares of TSMC are a buy-rated favorite for all but one (who rates it a hold) of 29 analysts who cover it on FactSet. U.S.-listed shares are rated a buy by all 28 analysts who cover it.
U.S.-listed shares of the company, which are worth five of the common shares, have traditionally traded at a premium over the Taiwan shares, although the new rules could trim up that gap. The ADR is up 131% over a year, while local shares are up 146%.
Solid results from TSMC for the first quarter confirm to many tech investors that momentum in the chip spending cycle is very much intact.
-Barbara Kollmeyer
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(END) Dow Jones Newswires
04-24-26 0931ET
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