KUALA LUMPUR (March 8): Technology continued to be the worst-performing sector on Bursa Malaysia amid the heavy selling pressure on the local bourse. This comes as the tech-heavy US Nasdaq slipped into bear territory.
The technology index tumbled 6.02% on Tuesday (March 8) against the benchmark FBM KLCI’s 1.63% fall. Year to date (YTD), the former is down 34.7%, while the latter has slipped 1.3%.
Nonetheless, most analysts still have “buy” calls on technology stocks, with Genetec Technology Bhd and Greatech Technology Bhd seeing the highest upsides of 159% and 125.9%, based on their consensus target prices of RM4.30 and RM6.55 respectively. Both counters have skidded 45.3% and 56.9% since early this year.
YTD, big names in the technology space have seen their market values wiped off by half. Besides Greatech and Genetec, other worst-hit peers include Mi Technovation Bhd (-53%), UWC Bhd (51.2%) and Pentamaster Corp Bhd (49.6%).
Inari Amertron Bhd, which is the sole technology representative in the FBM KLCI, has also tumbled 34% since early this year. Of the 22 analysts tracking the stock, 20 have a “buy” call, while two are recommending “hold”. The consensus target price of RM4.31 implies an upside of 63.3%.
Reuters said the Nasdaq on Monday closed down more than 20% from its Nov 19 record closing high, confirming that the index is in a bear market. This marks the Nasdaq's first bear market since 2020, when the coronavirus outbreak crushed global financial markets. Meanwhile, Inter-Pacific Securities Sdn Bhd said there is no change to the immediate market outlook, following the sell-off of global equities overnight that is also set to prolong the malaise among Malaysian stocks.
In its daily bulletin on Tuesday, the research house said this could see wariness continuing to affect the direction of the economy, amid fears that the increasing cost will eat into margins and delay corporate earnings recovery.
It said the unsettled market condition could also prompt further profit-taking and selling of some of the stocks that had made significant headway since the start of the year, as market players take a more defensive stance until stability is found.
“As such, downside risk remains, with the immediate support of 1,570 points unlikely to hold.
“Thereafter, the supports are located at 1,565 and 1,555 points respectively.
“The hurdles, meanwhile, are at 1,580 and 1,590 points respectively,” it said.
Inter-Pacific said the lower liners and broader market shares took
the brunt of the selling on Monday, registering steep falls as retail
players continued to move out of the market. With market conditions
still looking unsettled, the selling pressure is likely to stay and
prolong the risk of further near-term downside.
http://www.theedgemarkets.com/article/technology-stocks-remain-under-pressure
