TSMC shares jump as Taiwan eases single-stock holding rules

(Sharecast News) - Shares in Taiwan Semiconductor Manufacturing Co jumped on Friday after Taiwan's stock market regulator relaxed rules on how much investment funds can plough into listed companies. The Financial Supervisory Commission ruled that the single-stock holding limit for local equity and ETFs would now be 25%, effective Friday, for companies whose value is worth more than 10% of the Taiwan Stock Exchange.

Currently, funds can only invest up to 10% of their total net asset value into a single company.

TSMC, which has a market cap of TWD56.66trn (£1.34trn), currently makes up around 44% of the entire market value in Taiwan. It is the only stock that will benefit from the relaxed limit.

The move comes after a doubling of TSMC's stock over the past year as demand boomed for AI chips, with domestic fund managers frustrated by investment constraints limiting their ability to fully participate in the rally.

However, given TSMC's outsized weighting in Taiwan, analysts are now concerned about the concentration risk of TSMC on the local stock exchange, with movements in its share price potentially leading to volatile swings for the wider market.

TSMC shares finished 5.1% higher at TWD2,185.00 on Friday, taking the year-to-date rally to nearly 38% and 12-month gain to 153%.