Despite the lacklustre stock market performance in the first half of the year, qualified companies have not been too discouraged from listing given that initial public offerings (IPOs) remain fairly numerous. But more encouraging has been the performance of some of the newcomers as a number of them have vastly outperformed the benchmark index.
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PLASTIC packaging companies came under the spotlight last year as demand for plastic packaging-related products soared, spurred on by the change in consumption patterns of consumers across the globe as a result of the Covid-19 pandemic.
However, the recent meteoric rise in the price of resin a crucial material in plastic manufacturing could halt the good run that plastic packaging manufacturers have enjoyed so far.
While raw material prices are definitely a concern, some point to the weaker US dollar, which could take a toll on these manufacturers as they derive a large portion of their revenue from overseas markets.
WHY are plantation stocks not on the radar of investors even though crude palm oil (CPO) prices have gained as much as 18% from RM3,070 per tonne on Nov 3 last year to RM3,632 per tonne last Wednesday?
Analysts say there are several factors dampening prices, but warn that environmental, social and governance (ESG) issues that now plague the sector could be the most damaging if not swiftly addressed. This is because international investors are increasingly placing great value on such practices.
As Covid-19 vaccines are now available, investors have shifted their attention from glove makers and manufacturers of personal protective equipment to technology stocks, owing mainly to strong demand for semiconductors. The lack of interest in plantation stocks is palpable as reflected in the Bursa Malaysia plantation index.
KUALA LUMPUR (Feb 26): Share prices of semiconductor-related companies on Bursa Malaysia are hitting record highs; so are their latest quarterly earnings.
The few companies that posted record high quarterly net profits are UWC Bhd, Vitrox Corp Bhd, Inari Amertron Bhd and Greatech Technology Bhd.
Fund managers and investment analysts told The Edge that the astronomical increases in earnings among semiconductor companies are expected to continue in the current year, particularly because of the chip shortage that has been accentuated by the further computerisation of consumer electronics, the implementation of 5G, and greater usage of technology in the automotive industry.
TA Investment Management Chief Information Officer Choo Swee Kee expects earnings for semiconductor companies to be strong on the recovery of consumer demand for electronic and electrical products post-pandemic worldwide.