Bursa technology stocks tumble again as US tech shares crash on US tapering concern

Bursa technology stocks tumble again as US tech shares crash on US tapering concern
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KUALA LUMPUR (Jan 14): Technology stocks on Bursa Malaysia tumble again as US big tech shares crashed on US tapering concerns.

It was again a sea of red for the sector with Bursa Malaysia Technology Index slipping 5.52 points or 6.2% to 83.45 on Friday's (Jan 14) noon break.

The fall was led by Malaysian Pacific Industries Bhd, which was the top loser in terms of value, plunging RM3.80 or 8.12% to RM43.

This was followed by ViTrox Corp Bhd, which slumped RM1.52 or 8.25% to RM16.90; SAM Engineering & Equipment (M) Bhd, which fell RM1.08 or 4.94% to RM20.80.

Panasonic Manufacturing Malaysia Bhd, Kobay Technology Bhd, D&O Green Technologies Bhd, Greatech Technology Bhd, Unisem (M) Bhd, KESM Industries Bhd were also among the top 10 losers in terms of value.

Panasonic slipped 66 sen or 2.22% to RM29.12; Kobay slid 61 sen or 11.11% to RM4.88; D&O declined by 58 sen or 11.11% to RM4.64; Greatech tumbled 52 sen or 9.39% to RM5.02; Unisem lost 51 sen or 14.25% to RM3.07; KESM went down 46 sen or 3.72% to RM11.90.

“There was a rout on Nasdaq [on Thursday] night, Malaysian technology stocks were just following suit,” Inter-Pacific Securities head of research Victor Wan told theedgemarkets.com.

He expects technology stocks, which had a good run last year, to remain volatile in the short term because of the US tapering concern.

“The sector needs to pull back a little bit before making another push later on. If the share prices are low enough, it will become an attractive proposition,” he added.

Malacca Securities Sdn Bhd senior analyst Kenneth Leong concurred with Wan and said the downtrend of Bursa technology stocks was due to the weakness in Nasdaq.

“Based on the current situation, the downtrend is expected to continue. Technology sector had a good run in 2021, I think investors are using this as an excuse to take profit,” he said.

However, in the long term, he opined that technology stocks' fundamentals remain intact, supported by their earnings growth.

“Now the technology [sector] is still under downward pressure. Investors could wait for the market sentiment to stabilise then to start bargain hunting,” he said.

Reuters reported that US stocks ended lower on Thursday, led by declines in Nasdaq and technology shares, as several Federal Reserve officials spoke about battling high inflation.  

The Nasdaq dropped 2.5%; the S&P 500 technology index, which benefits from a low interest rate environment, fell 2.7% and led declines in the benchmark index, according to the newswire.

Surin Murugiah