Semiconductor stocks on the rise as ringgit weakens

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KUALA LUMPUR (Aug 18): Semiconductor stocks such as Inari Amertron Bhd, Globetronics Technology Bhd and Malaysian Pacific Industries Bhd (MPI) were among top gainers on the exchange during the morning trading session, following the weakening of the ringgit against the greenback.

At 11.16am, Inari (fundamental: 3.0; valuation: 2.1) gained 16 sen or 5.5% to RM3.08, with some 2.2 million shares done. The counter earlier gained as much as 20 sen or 6.8% to reach a high of RM3.12.

MPI (fundamental: 1.8; valuation: 2.0) rose 15 sen or 2.6% to RM5.82, with 270,000 shares traded, after touching a high of RM5.85, while Globetronics (fundamental: 3.0; valuation: 1.7) increased 12 sen or 2.1% to RM5.72.

AllianceDBS Research analyst Toh Woo Kim said semiconductor stocks were among exporter stocks which are in focus today, as the broader market was seen to be staging a technical rebound.

“The market is undergoing a technical rebound and investors are eyeing export-oriented stocks such as these semiconductor stocks due to the weakened ringgit. Also, the US semiconductor companies are doing relatively well,” he told

He noted the broad selldown in the market in recent weeks, due to the pessimistic outlook on the market amid the local and external headwinds.

Going forward, Toh said there is still a lack of clarity for the semiconductor segment in the latter half of 2015, in view of these macroeconomic risks.

“The outlook for the second half is still a bit uncertain, as there are some external headwinds, which could impact the end-demand,” he said, adding that the segment is undergoing an inventory correction, which could mean slower growth for semiconductor companies.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)