AmInvestment upgrades Malaysia technology sector

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KUALA LUMPUR (July 9): AmInvestment Bank Bhd upgraded the Malaysian technology sector to overweight from neutral. AmInvestment said today the sector's outlook is positive during 2018's second half (2H18).

In a note today, AmInvestment said earnings prospects are looking positive for local semiconductor companies.

"The key theme of the sector in 2H18 should revolve around connected cars, smart homes and automation. This paints a positive outlook for sensor and radio frequency (RF) chip manufacturers, automated equipment manufacturers and companies looking to improve operational efficiencies through automation.

"In the smartphone segment, while sales volume is plateauing in developed markets, sensor and RF content continues to increase," AmInvestment said.

AmInvestment said its top picks for the sector are Inari Amertron Bhd and Malaysian Pacific Industries Bhd (MPI).

"Our OVERWEIGHT stance on the technology sector may be further strengthened if: 1) there is a change in the USD outlook for the better; 2) the semiconductor companies under our coverage (Inari, MPI and Unisem) secure new jobs of significance; and/or 3) share prices correct by 15-20%," AmInvestment said.