The electronics manufacturing services (EMS) sector in Malaysia has seen mixed performance in 2024 despite being part of the broader tech upcycle, with rising costs, inflation, and supply chain disruptions offsetting growth from increased global demand and outsourcing trends. Key EMS Performances Winners : SKP Resources Bhd (+76% YTD) V.S. Industry Bhd (+47% YTD) NationGate Holdings Bhd (+51% YTD) P.I.E. Industrial Bhd (+29% YTD) Strugglers : ATA IMS Bhd (-8% YTD) JHM Consolidation Bhd (-36% YTD) Growth Drivers and Challenges Diversification Opportunities : The China+1 and Taiwan+1 strategies have positioned Malaysian EMS players to gain market share. However, reliance on major customers, such as Dyson, continues to be a concern. Cost Pressures : High inflation and production costs have affected profit margins. Company Highlights SKP Resources : Recorded a 27% y-o-y net profit increase , benefiting from a recovery in consumer demand. V.S. Indust...
Local institutional investors sustained their buying momentum on Bursa Malaysia for the ninth consecutive week, recording net equity purchases of RM1.05 billion last week, up from RM995.5 million the prior week, according to MIDF Research.
Key Insights
- Foreign Investors: Continued to exit the market with a net outflow of RM1.07 billion, marking another week of selling.
- Sector Trends:
- Highest Net Foreign Inflows: Property (RM42.6M), Technology (RM40.2M), Plantation (RM29.4M).
- Highest Net Foreign Outflows: Financial Services (-RM500.5M), Healthcare (-RM168.9M), Utilities (-RM160.5M).
Retail Investors Return to Buying
- After four weeks of net selling, local retail investors turned net buyers with RM13.8 million in net purchases.
Regional Context
- Asia-Wide Trend: Foreign investors recorded US$4.7 billion in net outflows across eight Asian markets, a 2.6x increase from the previous week.
- Key Contributors:
- Taiwan: Largest outflow at US$2.24 billion, influenced by the central bank's unchanged interest rate at 2% and an upward revision of the 2024 growth forecast to 4.25%.
- South Korea: Switched to a US$1.61 billion outflow from the previous week's net buying, amid political turmoil following the impeachment of President Yook Suk Yeol.
Trading Volume
- Average Daily Trading Volume (ADTV):
- Local retail and foreign investors saw double-digit increases of 10.2% and 20.9%, respectively.
- Local institutions reported a more modest rise of 5.7%.
Conclusion
The consistent buying by local institutions underscores confidence in the domestic market despite persistent foreign outflows and global uncertainties. However, the regional net selling trend, particularly in Taiwan and South Korea, signals caution for broader Asian equities.
Comments
Post a Comment