After 32 sessions, TSMC returns to ex-dividend level

Taipei, Aug. 8 (CAN) After 32 trading sessions, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) saw its share price returning Tuesday to a level prior to going ex-dividend.

Going ex-dividend (which means that the share price of a stock is cut by the cash dividend per share it pays to shareholders) on June 26, TSMC's opening reference share price was lowered from NT$217.00 (US$7.19) to NT$210.00, which was equivalent to its cash dividend per share for the chip maker's 2016 earnings.

On the back of optimism toward its shipments for the third quarter of this year, a traditional peak season for the global integrated circuit industry, shares of TSMC continued its momentum from a session earlier to open higher Tuesday, and the upturn continued, despite being compromised to some extent by profit- taking on the broader market.

At the end of the session, TSMC shares had risen 0.69 percent to close at NT$217.50, off an earlier high of NT$219.00 on the Taiwan Stock Exchange to return to its pre-ex-dividend level.

Buying in TSMC also reflected gains posted by IC stocks in the U.S. market, where the Philadelphia Semiconductor Index rose 1.74 percent overnight.

The stock, the most heavily weighted in the local equity market, outperformed the broader market, where the weighted index closed down 10.41 points, or 0.10 percent, at 10,568.97, serving as an anchor to keep the broader market from falling further, dealers said.

When TSMC would return to the prior cash dividend level after going ex-dividend had been watched closely by many investors, as the stock is the most important indicator to the movement of the local equity market.

The NT$7 payout was the highest cash dividend payout from TSMC, up from NT$6 issued a year earlier, after the chip maker reported a record high of NT$334.25 billion and a new high of NT$947.94 billion in consolidated sales for 2016, largely on the back of solid global demand for mobile devices.

The chip maker issued a total of NT$181.5 billion in cash dividends, the majority of which went to foreign institutional investors which own a roughly 80 percent stake in the company.

Market analysts said that TSMC shares regained momentum in recent sessions, since the market has embraced high hopes that the launch of the next-generation iPhones by Apple Inc. will boost the chip maker's sales for the third quarter.

The company has forecast that its consolidated revenue for the July-September period will range between US$8.12 billion and US$8.22 billion, up almost 16 percent from a quarter earlier. It was the first time TSMC had given sales guidance in U.S. dollar terms, a move that is expected to avoid volatility of the Taiwan dollar against the greenback.

After kicking off the mass production of the newest 10 nanometer process in the fourth quarter of last year, TSMC is currently devoting considerable effort to developing 7nm, 5nm and 3nm processes in a bid to maintain its lead over its peers in the global wafer foundry business.

Source: Focus Taiwan News Channel