Deepseek logo is seen in this illustration taken January 27, 2025. REUTERS/Dado Ruvic/Illustration
PETALING JAYA: YTL-related stocks and local technology counters were the collateral damage of China’s new artificial intelligence (AI) model, which is both cheaper and more powerful than those of Meta and OpenAI.
DeepSeek, founded by Liang Wenfeng, has sent shockwaves through the Silicon Valley in the United States, with the release of its DeepSeek-V3 large language model.
US tech stocks suffered a significant drop in premarket trading yesterday.
Nvidia Corp, for instance, saw its share price falling by over 11% in premarket trading at the time of writing.
OpenAI’s ChatGPT is trained on Nvidia’s graphics processing units or GPUs.
Nvidia is also YTL Power International Bhd
’s partner in building an AI data centre in Kulai, Johor.
The negative futures sentiment on Wall Street spread quickly to Malaysia, dragging shares of YTL Power down by almost 11% yesterday to RM3.22.
This further extended YTL Power’s share price downtrend, wiping out its entire gain in market capitalisation since November.
Investors are fretting over the future demand for YTL Power’s infrastructure amid the emergence of DeepSeek and the impact it may have on Nvidia.
YTL Power’s parent, YTL Corp Bhd, also saw its share price drop by almost 9% to RM1.93.
Meanwhile, Bursa Malaysia’s Technology Index fell by 2.3%, with 31 out of 49 component stocks ending in the red.
The Technology Index was the third-worst performer yesterday, after Construction (-3.29%) and Utilities (-3.03%).
YTL Power was the top loser within the Utilities space. YTL Corp came in fourth.Both YTL Corp and YTL Power were among the most actively traded stocks yesterday.
Notably, YTL Power and YTL Corp have been under water in recent days after announcing their respective one-for-five bonus warrants.
The warrants, which are not tradeable, disappointed investors, although analysts were positive over the proceeds of YTL Power’s bonus issue funding the company’s key projects.
With both YTL counters ending the day in the red, they dragged down the FBM KLCI and forced the benchmark index to close at an intraday low.
The FBM KLCI fell 14.76 points, or 0.94%, to 1,558.97 points.
The KLCI-segment stocks saw a predominance of losses, with 18 decliners and nine advancers.
All indices on Bursa Malaysia ended lower, except for the Bursa Malaysia Financial Services Index.
Market breadth was negative across the local exchange as 782 losers trumped 235 gainers, with 415 counters traded unchanged.
About 2.75 billion shares, valued at RM2.37bil, changed hands.
According to dealers, investors remained cautious amid renewed concerns over US President Donald Trump’s tariff plans, coupled with the anticipation surrounding the Federal Reserve’s upcoming policy decision this week.
Elsewhere in the region, Japan’s Nikkei 225 fell 0.92%, Hong Kong’s Hang Seng Index closed up 0.66%, China’s CSI 300 Index dropped 0.41%, and Singapore’s Straits Times Index eased 0.1%.
Markets in South Korea and Taiwan were closed on Monday for the Lunar New Year celebration, while markets in China are shut from today and will only resume on Feb 5.
