Taiwan clears foreign brokers of inappropriate TSMC research reports

Taiwan’s financial regulator has cleared foreign brokers of behaving inappropriately with analyst reports on chip maker TSMC after lawmakers questioned whether they were making buy recommendations but actually selling the stock.

A Financial Supervisory Commission official said they had sent questionnaires to brokerages about their analyst reports on Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple Inc supplier and the world’s largest contract chip-maker.

The regulator, in a written response to lawmakers, a copy of which was reviewed on Monday, said that 10 brokerages, which it did not identify, had produced 45 research reports on TSMC between December and mid-March.

It said the brokerages’ analyst reports did not break any regulations, and that investment decisions were made by professional investors who adjust their asset allocation in response to international market fluctuations and global layout considerations.

Brokerage clients make their own decisions, and do not necessarily operate in the direction suggested by research reports, it added, citing the responses to the questionnaire.

TSMC’s Taipei-listed shares have fallen about 11 per cent this year, while the broad market is down about 9 per cent.

TSMC this month forecast an up to 37 per cent jump in current-quarter sales and said it expected chip capacity to remain very tight this year, amid a global crunch that has kept order books full and allowed chipmakers to charge premium prices. CNA