Taiwan Semiconductor (NYSE: TSM) Message Board

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Technology Stocks : Taiwan Semiconductor (NYSE: TSM)

TSM 326.74

-2.7%

3:28 PM EST

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To: Scott TSAI who wrote (483)	5/12/1999 9:12:00 AM
From: tom	Read Replies (1) of 684

I think there will always be some premium between the ADR and the local stock as it is a time-consuming and expensive process to set up a QFII (foreign investor) account in Taiwan. There is also a big supply demand issue as there aren't many ADRs and US investors are willing to pay up for technology companies in a way that Taiwanese local investors are not. Taiwan's stock market volume is 97% local and highly speculative. They are not as interested in LT investment as "foreigners". Incidentally, Korea allowed holders of the local SK Telecom stock to convert half their holding into ADRs and the premium is still over 50%. As an aside, this latest news on conversion is not the same as the old ruling allowing the government and Philips to place out local stock as ADRs. This latest move was triggered by Capital International who were annoyed that the chairman of TSMC was allowed to sell his stock in the form of ADRs and demanded equality for all (large) shareholders.

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