(Bloomberg) -- Taiwan Semiconductor Manufacturing Co’s US-listed shares cost almost 25% more than those in its domestic market at the end of last week, a sign that global investors are still willing to pay up for stocks that can benefit from the AI boom.
The chipmaker’s American depositary receipts have long traded at a premium to its Taipei-listed equities, due to a mix of easier access for foreign investors and inclusion in popular indexes. But the 24.6% premium at Friday’s close was the highest since Oct 17 and well above the daily average of 19% for this quarter, according to data compiled by Bloomberg.
The premium ballooned due to the differing fortunes of the Taipei- and New York-listed stocks on Friday. The company’s local shares closed down around 3.3%, after a nervous trading session across much of Asia. But by the time New York trading opened, the mood had improved, pulling an index of semiconductor stocks higher. TSMC’s US shares ended the day around 1.3% higher.
TSMC’s local shares rose as much as 4.4% during Monday morning, reducing the premium to below 20% — at least until US investors start trading.
The ADRs are included in gauges like the Philadelphia Stock Exchange Semiconductor Index and in exchange-traded products such as the VanEck Semiconductor ETF and iShares Semiconductor ETF, meaning that funds tracking them must buy the US-listed securities.
READ: Popular Arbitrage Trade Backfires as TSMC Frenzy Grows in US (2)
©2024 Bloomberg L.P.