Reported 9 months ago
The popular arbitrage strategy of buying Taiwan Semiconductor Manufacturing Co.'s Taipei shares while shorting its US listing is facing challenges as TSMC's American depositary receipts (ADRs) trade at a premium of around 21% compared to less than 8% for the five-year average. The enthusiasm in the US for artificial intelligence has driven up TSMC's ADRs, which are more easily accessible to foreign investors and preferred by funds and ETFs. This has caused the ADRs to outperform Taipei shares and trade at a higher premium over the Taiwanese stock, leading to concerns among investors waiting for a correction.
Source: YAHOO