KUALA LUMPUR (July 13): Inari Amertron Bhd’s shares closed at a 15-month high of  RM3 on Friday (July 14) on fresh interest in technology stocks as US inflation slowed. The counter saw 40.1 million shares changing hands in active trading.

Including the 7.1% rise on Friday, Inari has climbed 29% over the last one year from RM2.32 on July 14, 2022. Year-to-date, the stock is up 16.5%.

At RM3, Inari is valued at a P/E of 32.4 times, according to Bloomberg data.

Inari focuses on providing outsourced semiconductor assembly and test (OSAT) niche services in radio frequency system in package for smart mobile devices, fiber-optic transceiver and electronics manufacturing services industries.

Twelve analysts have issued "buy" calls on Inari, with "hold" calls from nine others.

Inari’s peers in the OSAT sector also saw their shares bounce, with Malaysian Pacific Industries (MPI) up 8.1% to RM31.24, its biggest gain in more than seven months, according to Bloomberg data.

Unisem (M) Bhd rose 7% to RM3.52 and Globetronics Technology Bhd advanced 11% to RM1.60.

Meanwhile, among automated test players, ­ViTrox Corp Bhd rose slightly by 0.3% to RM8.02, while Pentamaster Corp Bhd jumped 5.3% to RM5.40, its biggest gain in five months.

Semiconductor equipment maker Mi Technovation Bhd also jumped on Friday by 4.5% to RM1.62.

'Slower inflation a postive development for rest of 2023'

Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng, when contacted, said the surge of interest in the technology sector was due to the lighter-than-expected key inflation reading in the US.

According to the US Bureau of Labor Statistics, the country's annual inflation slowed to 3% in June.

The S&P 500 and the Nasdaq Composite closed at their highest levels in over a year, noted Wong.

“Building on the optimism from Wednesday’s consumer price index data that was released in the US, it appears interest is back in technology-related counters. The inflation rate was lower than expected. So this will be a catalyst for the overall semiconductor industry which would see this as a positive development for the rest 2023. There is a hope that the OSAT companies will revive faster than expected," said Wong.

He added: “Most of the semiconductor players from front-end to the back-end where we (Malaysia) are mostly at, will be lifted by the US data release.”

The S&P 500 climbed 0.85% to 4,510.04, while the Dow Jones Industrial Average added 47.71 points, or 0.14%, to close at 34,395.14. The Nasdaq Composite advanced 1.58% to end at 14,138.57. It was the fourth consecutive day of gains for the major averages.

Wong said that although the US Federal Reserve has not backed down on its interest rates hike cycle, investors are looking ahead to corporate earnings and balance sheets.

He added that the positive development also led to the Bursa Malaysia Technology Index rising 4.28% to 65.76 points.  
 
The index's components include large semiconductor companies such as MPI, D&O Green Technologies Bhd, Unisem, VS Industry Bhd, SKP Resources Bhd, ViTrox, Greatech Technology Bhd, UWC Bhd, Pentamaster, Mi Technovation, Frontken Corp Bhd, Inari and Aemulus Holdings Bhd.