KUALA LUMPUR (June 23): The tech selldown in South Korea spilled over to Malaysian technology-related stocks, pulling the Bursa Malaysia Technology Index down by 3.96% to two-week low of 71.39 points.
The sell-off mirrored weakness across regional stocks, particularly in South Korea, where the benchmark Kospi plunged nearly 10% after regulators cautioned on leveraged exchange-traded funds (ETFs) linked to chip stocks, sparking a sharp correction in semiconductor counters.
In the last 30 minutes before closing, selling pressure emerged on the FBM KLCI component stocks, pushing the benchmark index down by 1.23%, or 20.92 points, to 1,679.92 points. Some 879 stocks closed lower while 325 were higher.
The technology rout swept across the local semiconductor-related sector. Chip designer SkyeChip Bhd (KL:SKYECHIP) was among the big losers, plummeting 10%, or 34 sen, to close at RM3.02 on Tuesday.
Automated test equipment (ATE) provider THMY Holdings Bhd (KL:THMY) slid 21 sen or 11.05% to RM1.69, while Greatech Technology Bhd (KL:GREATEC) fell 20 sen, or 7.5%, to RM2.47.
Among others, Malaysian Pacific Industries Bhd (KL:MPI) lost RM2.34 or 4.79% to RM46.50, UWC Bhd's (KL:UWC) share price slid 35 sen or 5.43% to close at RM6.10, while Mi Technovation Bhd (KL:MI) lost 30 sen or 6.22% to RM4.52. ViTrox Corp Bhd (KL:VITROX) retreated 26 sen or 3.49% to RM7.20, while KESM Industries Bhd (KL) dropped 20 sen or 4.88% to RM3.90.
Some see this as a short-term correction after the global rally in recent months, believing that the fundamentals did not change.
“Today's decline was mainly due to weaker sentiment across regional markets following the global sell-off in technology and AI-related stocks. Malaysia was not alone, as most Asean markets also ended lower,” said PMB Investment Bhd CEO Hang Tuah Amin Tajudin, in response to a query by The Edge.
He added that the lack of strong local catalysts and cautious market sentiment added to the pressure. Hang Tuah noted that investors need to keep a close watch on whether regional markets stabilise soon.
“At this stage, we see today’s move as a reaction to weaker global and regional sentiment rather than a change in Malaysia’s fundamentals. If sentiment improves, bargain hunting may return to quality blue-chip stocks,” said Hang Tuah.
The Bursa Technology Index has soared 28.7% year to date, despite selling on Tuesday.
Warnings surfaced as early as June 8, when Kenanga Research flagged that near-term optimism may have been priced in too quickly, leaving the sector more vulnerable to profit taking, sector rotation and valuation compression.
The research house advocated partial profit-taking on trading positions while maintaining core exposure to fundamentally strong names, framing it as a recommendation to manage near-term risk more actively rather than an exit call on the sector.
Reuters reported that South Korean chipmakers Samsung Electronics and SK Hynix each fell more than 12%, weighing on broader investor sentiment towards Asian technology stocks.
Tuesday’s selldown brought an abrupt halt to a tech rally that had gathered momentum since early April, driven by enthusiasm over global artificial intelligence infrastructure spending and the growing number of data centre projects.
The pressure was an extension from outside Malaysia as global equities retreated on Tuesday as investors grew increasingly wary of the US Federal Reserve’s next move, with stronger-than-expected economic data raising the odds of more aggressive action to stave off inflation, according to an article by Reuters.
Besides technology stocks, banking and telecommunications stocks also declined on Tuesday. Meanwhile, plantation and transportation & logistics stocks performed better.