Taiwan Semiconductor Manufacturing Company Limited and United Microelectronics Corporation update

Posted on April 16, 2006 , filed under Stocks | Print This Post

Watching 2303.tw and 2303.tw on the Taiwan Stock Exchange can give you an indication of how NYSE ADR listed TSM, Taiwan Semiconductor Manufacturing Company Limited and UMC, United Microelectronics Corporation may perform. Taiwan is 12 hours ahead of Eastern Standard Time in the USA. The market was closed on Friday, April 14th, 2006 for Easter in the USA but was open in Taiwan.

2303.tw closed at $68 last Friday, off .58% from its 52 week high of $68.40. TSM closed at $10.55 last Thursday, off 4.43% from its 52 week high of $11.04. 2330.tw closed at $21.10 last Friday, off 8.26% from its 52 week high of $23.00. UMC closed at $3.45 last Thursday, off 22.47% from its 52 week high of $4.45.

ADR’s listed here often do not move in immediate tandem with the stocks counterpart in the primary exchange they are listed. Market factors and economic conditions in the USA influence investors trading momentum and risk tolerance in investing in ADR’s. I believe the benefit from watching the ADR’s counterpart is to identify undervalued opportunities. While researching TSM and UMC, I found that both were heavily down in an improving semiconductor industry. The comparative performance of TSM and UMC to the stocks performance on the Taiwan Stock Exchange was quite large. Currently the difference in percentage performance is 7.64 times for TSM compared to 2330.tw and 2.72 times for UMC compared to 2303.tw. I expect that over time the ADR’s listed here will adjust to more evenly match the performance of the counterpart stock. Case in point, when TSM established its 52 week high of $11.04 on January 9th, 2006, 2330.tw established its 52 week high of $68.40 in the trading day 12 hours earlier. Watching the performance of 2330.tw and 2303.tw can give you an idea when TSM and UMC are setup to play catch up.

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