Taipei, July 11 (CNA) Shares of Taiwan Semiconductor Manufacturing CO. (TSMC) remained one of the most favored stocks for foreign institutional investors in recent sessions amid hopes that the world's largest contract chipmaker will benefit from the lead it has commanded over its peers in high-end technology development, dealers said Saturday.
Echoing the strong interest by foreign institutional investors in TSMC, a U.S.-based brokerage has raised its target price on the stock to NT$355 (US$11.99) from NT$325 as the securities house appeared upbeat that the chipmaker will secure large orders on chips made on its advanced 5 nanometer process.
Foreign institutional investors bought a net 111.71 million TSMC shares in the past nine trading sessions on the main board after a net buy of 23.96 million shares on Friday alone, making the stock a force driving the gains posted by the main board recently, data compiled by the Taiwan Stock Exchange (TWSE) showed.
The net buy of TSMC shares was the second largest on the local main board Friday after the Fubon S&P 500 VIX Short-term Futures ETF, which had a net buy of 26.85 million shares, the data indicated.
On Friday, TSMC shares closed up 1.01 percent at a new high of NT$348.50 per share on the local main board, where the weighted index (Taiex) ended down 0.98 percent on profit taking. A stronger TSMC share price, the most heavily weighted stock in Taiwan, prevented the broader market from falling further, dealers said.
Friday's gains boosted TSMC's market capitalization to NT$9.03 trillion, also a new high.
In the past nine trading sessions, due to strong buying from foreign institutional investors, TSMC shares gained 11.7 percent, while the Taiex rose 4.60 percent.
In a research note, the American brokerage said Apple is expected to make a great contribution to shipments of TSMC's 5nm process in the second half of this year.
That would offset a decline in orders placed by HiSilicon Technologies Co., an integrated circuit designer under Chinese telecom equipment giant Huawei Technologies Co., amid sanctions imposed by Washington, the brokerage said.
It added that continued solid demand for 5G applications and high performance computing devices is expected to give another boost to TSMC's sales in the second half of the year.
The securities house has raised its forecast of TSMC's earnings per share by 9 percent from its previous estimate to NT$16.72 for 2020, while leaving an "overweight" rating on the stock unchanged.
TSMC has scheduled an investor conference for July 16 to detail its second quarter results and give third quarter guidance.
