(Updated)

Bursa technology stocks up on bargain hunting, Nasdaq rise

Bursa technology stocks up on bargain hunting, Nasdaq rise
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KUALA LUMPUR (April 1): Bursa Malaysia Technology index constituents including ViTrox Corp Bhd and Genetec Technology Bhd rose among the top gainers in morning trade on bargain hunting and after an overnight rise in the US' S&P 500 and Nasdaq, helped by gains in technology shares.

At 10.21am today, top gainer ViTrox’s share price had risen 28 sen or 1.87% to RM15.22, while Genetec climbed 10 sen or 2.35% to RM4.35.

Later at 10.26am, the Technology Index had climbed 0.38% as technology stocks gained on bargain hunting after a period of consolidation, according to analysts.

Rakuten Trade Sdn Bhd head of research Kenny Yee told theedgemarkets.com that the rise in Bursa-listed technology stocks "is mostly due to bargain hunting after a period of consolidation”.

Yee, however, thinks the current rise in share prices of technology companies is only for the short term because of prevailing high market volatility. 

Fund managers concurred with equity analysts on this. Areca Capital Sdn Bhd chief executive officer (CEO) Danny Wong told theedgemarkets.com today that the firm expects technology stocks' volatility to continue as short-term investors may take profit on such counters with high valuations.

From a long-term viewpoint, Wong said Areca Capital "believes 5G and electric vehicles (EVs) will continue to drive demand for semiconductors in the next few years”.

At a glance, the rise in share prices of technology-based companies, such as semiconductor manufacturers, was partly due to higher demand for electronic products such computers as Covid-19 pandemic-driven movement restrictions resulted in many people working from home to curb the spread of the outbreak.

The rise in US government bond yields is, however, bad for technology shares as these stocks, which have a low-rate environment heavily incorporated into their high valuations, have been among the most impacted, according to news reports.

"US stocks ended down slightly on Tuesday, with investors selling tech-related growth shares after US Treasury yields hit a 14-month high,” Reuters reported.

The S&P 500 and Nasdaq, however, rose yesterday, boosted by gains in technology shares, and the three major Wall Street indices registered their fourth straight quarterly rise as investors positioned themselves for US President Joe Biden's massive infrastructure plan, Reuters reported.

Chong Jin Hun