AEM tumbles 11% along with Singapore and regional peers following Alphabet’s record plunge

[SINGAPORE] Investors dumped chip stocks in Singapore and the region on Friday (Oct 30) following a similar rout overnight on Wall Street.

By 9.30 am, AEM had lost more than 11 per cent to S$7.23, while UMS Integration had fallen over 6 per cent to S$2.04 and Frencken 4.7 per cent to S$2.02. Of the three, AEM recovered slightly to S$7.54, down 7.4 per cent as at 11.45 am.

Newly listed Mi Material, which makes chip packaging materials, was down 9 per cent at S$1.63 in early trade. It slid further to S$1.54, or 14.4 per cent down by 11.45 am. The stock had held at its initial public offering price of S$1.80 in its first two days of trading as OCBC bought shares on the open market to stabilise its price.

In South Korea, where SK Hynix and Samsung Electronics are among the world’s biggest chip manufacturers, the Kospi was down almost 5 per cent in mid-morning trading.

The region’s chip losses tracked an overnight slide on Wall Street, where shares of Google’s Alphabet closed 12.6 per cent lower at US$283.82 on Thursday – its biggest single-day loss since the company listed in 2004.

The exit from Alphabet was sparked by the company’s third-quarter revenue of US$127.6 billion coming in below expectations.

In the broader tech market, US stocks tumbled for a second session as investors rotated out of artificial intelligence-linked stocks on another round of disappointing earnings.

Amazon.com slumped 7.3 per cent after the company reported higher spending, while growth in its online business slowed.

Intel plunged after its sales forecast missed estimates. Sales in the fourth quarter will be US$15 billion to US$16 billion, the company said. Analysts, on average, estimated US$17 billion and some projections topped US$18 billion, according to data compiled by Bloomberg.

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A Reuters report quoted the company as saying that a deadly explosion at its Israel factory would erase roughly US$600 million in revenue over two quarters.

Futures for the tech-heavy Nasdaq 100 Index slid 2 per cent as the latest results added to a string of disappointments from major tech companies.

Singapore Exchange-listed chip shares have been on a downward trend over the past month.

Month to date, AEM has seen a 24.8 per cent drop in its share price. UMS has fallen 24 per cent, while Frencken has tumbled 22.5 per cent.