Taiwan Semiconductor Manufacturing Co.’s shares rose after regulators eased the limit on how much funds can invest in a single stock, allowing fund managers to pile in the world’s largest contract chip maker.
Local equity funds and actively managed exchange-traded funds can invest up to 25% of their funds into listed companies whose weight exceeds 10% of the Taiwan Stock Exchange starting from Friday, Taiwan’s financial supervisory commission said on Thursday. Previously, investment funds could only invest up to 10% of their total net asset value in one company.
TSMC, a contract chip maker for clients such as Nvidia and Apple, is the sole company that meets the new market weight requirement so far. Its market capitalization of 54.08 trillion New Taiwan dollars, equivalent to US$1.71 trillion, accounts for over 40% of the Taiwanese stock market’s capitalization.
Shares of TSMC were 4.3% higher in early Taipei trade Friday. Its gains sent Taiwan’s benchmark Taiex up 2.7%, making it the best performer across Asia despite the Middle East risks persist and energy prices remain elevated.
Taiwan’s stock market regulator said that the change was aimed at boosting flexibility for funds’ investments given the rapid development of Taiwan’s tech industry in recent years and the rising market capitalization of some large listed companies.
Taiwan’s semiconductor stocks have surged in recent years amid robust global demand for chips fueled by the boom in artificial intelligence.
Other Taiwanese semiconductor stocks also gained, with MediaTek jumping 8.1% and UniMicron Technology putting on 7.7%.
Write to Sherry Qin at sherry.qin@wsj.com
