Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Shares of Unisem (M) Bhd extended their decline to the lowest in nearly three months following weaker-than-expected second quarter results.
Stock Performance:
- Share Price: Unisem fell by as much as 4%, or 16 sen, to RM3.83, the lowest since May 14, 2024.
- Market Capitalisation: At 9.25 am, the stock was trading at RM3.84, giving the company a market capitalisation of RM6.19 billion.
- Trading Volume: The trading volume totaled 149,800 shares.
Analyst Reactions:
- RHB Research and CGS International: Both noted that Unisem's core earnings were below expectations, affected by lower margins from the product mix and additional operational costs.
- RHB Research: Despite the earnings miss, RHB maintains a 'buy' rating with a higher target price of RM4.40, citing cautious optimism from Unisem's management about higher loadings in the second half of 2024 (2H2024).
- CGS International: Maintained a 'reduce' call with an unchanged target price of RM2.00, highlighting Unisem’s 41% year-on-year decline in core net profit due to rising staff costs.
Operational Outlook:
- Unisem’s Management: Anticipates a strong ramp-up in its Chengdu operations in 2H2024, driven by key projects such as MEMs microphone modules for mobile devices and power module applications for the China market.
- Utilisation Rate: Near full capacity for flip-chip bonding, with preparations for capacity ramp-up at phase 3 Chengdu operations.
- Ipoh Operations: Production outlook remains subdued due to soft legacy radio frequency businesses for smartphones and new projects expected to ramp up by FY2025.
- Gopeng Plant: Started new pilot projects and aims to consolidate Malaysian operations in the longer term, also housing backend production lines as part of the China Plus One strategy.
Analyst Commentary:
- RHB Research: Believes in a recovery with quarter-on-quarter improvement and stronger loadings ahead, consistent with the overall sector trajectory. Recommends positioning to ride on the new semiconductor cycle.
- CGS International: Notes the strategic co-investment in testing equipment with key customers and the preparation for a production ramp-up, but remains cautious on the immediate outlook.
Unisem’s strategic efforts to ramp up production and adapt to market demands signal a potential recovery, but the immediate challenges and earnings miss reflect ongoing operational hurdles.
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