Technology index falls 2.7%

MyEG Services Bhd was the biggest decliner, closing 6.77% lower at RM1.24.

PETALING JAYA: The technology index of Bursa Malaysia declined 2.7%, or 1.11 points, to 40.02 points on Tuesday, following Apple Inc’s warning of missing its revenue target for the second quarter, largely caused by the impact of Covid-19.

The Covid-19 outbreak has caused manufacturing plants across China to shut down, stalling production and supply chain.

Of the total 38 constituents of the index, 25 technology stocks were down, with only six gainers -- Trive Property Group Bhd, MSCM Holdings Bhd, Censof Holdings Bhd, Mesiniaga Bhd, Willowglen MSC Bhd and Mi Technovation Bhd.

MyEG Services Bhd was the biggest decliner, closing 6.77% lower at RM1.24, followed by Theta Edge Bhd (-5.56%) and UWC Bhd (-4.89%).

According to AP, Apple Inc’s iPhone manufacturing facilities located outside the Hubei province, has since been reopened, though production is picking up at a slower pace.

This will limit the global supplies for Apple iPhones.

“On Jan 28, Apple said it expected second quarter revenue of between US$63bil (RM261.48bil) and US$67bil (RM278.08bil).

“Apple’s second quarter ends March 30.

“Apple says the situation is evolving and it will provide more information on its next earnings call in April, ” reported AP.

Apart from the lag in production, Apple also faces a slowdown in iPhone demand as its retail operations and sales in China are affected by Covid-19 precautions, with most retail stores closed or having shorter operating hours.

In particular, semiconductor companies in Malaysia that are involved in the Apple supply chain may feel the pressure, given that Apple is a substantial end-client in the supply chain for their products.

One of the semiconductor companies with a significant exposure to Apple is Globetronics Technology Bhd, which produced components operating within the Apple iPhone supply chain ecosystem.

Other companies that derive some of their sales from the Apple supply chain include Inari Amertron Bhd, Malaysian Pacific Industries (MPI) and Unisem (M) Bhd.

Despite the technology index’s decline in response to Apple’s warnings, the FBM KLCI was more resilient, closing 0.04 points lower at 1537.08 points yesterday.

This was led by a better showing by banks, save for Malayan Banking Bhd, which was down two sen at RM8.47, as well as a recovery by Tenaga Nasional Bhd and some oil stocks.

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technology stocks , Apple Inc , warning , My EG


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