HTC shares rebound after foreign institutional buying; worries remain
CNATAIPEI--Shares of Taiwan-based smartphone vendor HTC Corp. staged a rebound following foreign institutional buying into the stock for the past six sessions, dealers said.
September 18, 2013, 12:11 am TWN
However, market sentiment toward the stock remained cautious, amid concerns over HTC's sales for the third quarter and the stock's movement in the future, dealers said.
Shares of HTC rose 2.19 percent to close at NT$140.00 (US$4.71) with 16.26 million shares changing hands. The weighted index on the Taiwan Stock Exchange (TWSE) ended down 0.06 percent at 8,249.78.
“The gains were technical in nature after the stock's recent heavy losses. The news of foreign institutional buying simply prompted investors to pick up bargains during the session,” Grand Fortune Securities analyst Chen Wei-tai said.
According to the TWSE, foreign institutional investors served as net buyers of almost 16 million HTC shares in the past six months, taking a 23.15 percent stake in the smartphone vendor, up from 22.04 percent as of Sept. 9.
On Monday alone, foreign institutional investors bought a net 3.32 million HTC shares, TWSE statistics showed.
“I think foreign investors were basically bargain hunting and bought into the stock only for trading purposes,” Chen said.
In the first eight months of this year, HTC suffered a 47.31 percent decline, the steepest loss among the more than 800 stocks listed on the main board, dropping to NT$156.50, in particular after the company reported disappointing sales data for July and August.
After the 47.31 percent drop over the past eight months, HTC shares continued to trend lower and closed at NT$137.00 on Monday, as investors rushed to dump the stock after the company confirmed that it laid off about 20 percent of its 150 employees in its U.S. operations.
“Investors' confidence has been hard hit by HTC's gloomy sales reports for July and August and escalating worry that the company will not achieve its third quarter sales guidance of NT$50 billion-NT$60 billion,” Chen said.
HTC reported NT$28.9 billion in consolidated sales for the July-August period.
Credit Suisse has forecast that the Taiwanese smartphone vendor could see an increase in its September sales on the back of shipments of the HTC Butterfly S and the HTC One mini.
But Chen cautioned against buying into HTC stocks on the brokerage's forecast unless HTC presents positive sales numbers.