Tech jitters weigh on stocks; STI ends the day down 0.68%
Among the STI constituents, only three ended the day higher
THE Straits Times Index (STI) ended Friday (Jul 19) at 3,447.56, down 23.6 points or 0.68 per cent, amid broad selling across the Asia-Pacific.
Worries about heightened US scrutiny of the global semiconductor supply chain weighed on stocks, particularly the Taiwan and South Korea markets – both home to global chip champions. South Korea’s benchmark index fell 1 per cent, and the Taiex fell 2.3 per cent.
Taiwan Semiconductor Manufacturing Co, the world’s largest independent foundry, has come under intense selling pressure since former US president Donald Trump’s suggestion that Taiwan is taking chip business from the US.
Singapore-listed stocks suffered a similar fate. Semiconductor equipment maker UMS Holdings , which outperformed its peers on Thursday, fell 4.1 per cent on Friday to close at S$1.17. Its peer Frencken Group lost 5 per cent to close at S$1.51. AEM Holdings , which provides testing solutions, declined 4.3 per cent to end the day at S$1.80.
In a report dated Jul 19, DBS Group Research said it is cautious on UMS and AEM, given “weaker order momentum from key customers”. While it likes Frencken for its “diversified portfolio and positive guidance”, DBS is nevertheless watchful of the company’s “exposure to a key customer in the global equipment maker space that is affected by trade restrictions”.
DBS is more bullish on Venture Corp , which it said has a “has a more diversified customer base, (and) is less affected by export restrictions due to lower exposure to the semiconductor front-end or advance wafer fabrication equipment” space.
The Singapore market experienced a broad sell-off too. Decliners beat advancers 375 to 206, with 989.3 million securities worth S$1.1 billion changing hands.
Among the STI constituents, only three ended the day in positive territory. Beer brewer Thai Beverage ended up 1 per cent at S$0.505, conglomerate ST Engineering closed 0.9 per cent higher at S$4.45, and the Singapore Exchange closed up 0.4 per cent at S$9.77.
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