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April 26, 2017

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MediaTek shares get boost after foreign institutional buying

TAIPEI--Shares of MediaTek Inc. continued their upward momentum Wednesday following four straight sessions in which foreign institutional investors were net buyers of the stock, dealers said.

Strong foreign institutional buying was sparked by MediaTek's better-than-expected consolidated sales for January, which led investors to think that the IC designer's sales will not be too affected by the traditionally slow first quarter, they said.

The unveiling of the first global 4G Long-Term Evolution (LTE) eight-core smartphone chip by MediaTek on Tuesday reinforced market confidence in the company's bottom line, they said.

As of 11:20 a.m. shares of MediaTek had added 3.58 percent to NT$434.00 (US$14.27) after a 2.20-percent increase seen a day earlier, with 8 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.87 percent at 8,503.69.

Buying also spread to other IC design stocks to vault the semiconductor sub-index 1.26 percent higher, dealers said.

"Since Feb. 6, foreign institutional investors have accelerated their efforts to pick up MediaTek shares amid hopes that solid demand for smartphone chips in China will continue to give a boost to MediaTek's bottom line," Hua Nan Securities analyst Kevin Su said.

"After MediaTek shares closed above the 20-day moving average of NT$410 yesterday, the stock became technically healthier," Su said.

According to Su, foreign institutional investors bought a net 4.65 million MediaTek shares in the past four trading sessions, including a net 2.2 million shares on Tuesday alone. "Yesterday's strong foreign buying reflected MediaTek's January sales data. Solid demand in China offset slow season effects to some extent," Su said.

MediaTek posted NT$12.84 billion in consolidated sales in January, down 1.87 percent from a month earlier but up 51.95 percent from a year earlier.

At an investor conference held in late January, MediaTek said its consolidated sales for the first quarter are expected to range between NT$35.8 billion and NT$39 billion, down 2-10 percent from the fourth quarter on slow season effects.

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