Is there’s a hope for tech sector 2022?
- March 14, 2022
- 897
Tech stocks the world over have been absolutely hammered in 2022 so far, but it doesn’t spell danger for the sector overall. If you’re a keen investor in all things technology, you have reason to be a little concerned about the way the sector has started 2022. Everywhere you look, tech stocks are being hammered. Some of the world’s biggest names have not been immune: Netflix is down 33% this year, Tesla is down 21% and Amazon is down 16%.
Why is this happening?
- The tech market tumbles are due to wider concerns about interest rates and inflation.
- To be quite blunt, the performance in tech stocks this year has been pretty sad, unfortunately
- It is being driven by fear around interest rates and inflation, and that impacts growth stocks the most.
- Tech companies can experience faster growth and higher cash flow, and their value is in the future.
- It has been a big shock to the system after so many years of low-interest rates, and with COVID we saw huge pools of money being thrown into economies to stimulate growth, and as that happens we start to ratchet up interest rates.
But no need to panic and lose hope
- Despite the concerning falls being seen across the tech sector, there’s no need to panic about it being a long-term trend.
- The quality of earnings and fundamentals hasn’t changed for many tech companies, despite the share price falls.
- The tech sector has an impressive reputation for delivering returns on equity and strong balance sheets, two things that you want to look out for.
Kim’s selected local technology stocks
| COMPANY | Share Price On March 14, 2022 | Market Cap (RM Billion) | Target Price (RM) | Potential Upside (%) |
|---|---|---|---|---|
| Inari Amertron | RM2.91 | 10.78 | RM3.80 | 30.7 |
| Malaysia Pasific Industries | RM31.20 | 6.54 | RM41.00 | 32.0 |
| Unisem (M) | RM2.71 | 4.37 | RM3.50 | 29.0 |
| Vitrox Corp | RM6.48 | 6.12 | RM7.80 | 20.5 |
| D&O Green Technologies | RM3.99 | 4.93 | RM5.20 | 31.0 |
| UWC | RM3.34 | 3.67 | RM4.50 | 29.0 |
| Greatech Technology | RM3.41 | 4.26 | RM4.33 | 27.0 |
| Frontken | RM2.69 | 4.25 | RM3.30 | 23.0 |
| Pentamaster Corp | RM3.32 | 2.36 | RM4.00 | 21.0 |
| Dufu Technology | RM2.63 | 1.42 | RM3.41 | 30.0 |
“I am not worried about seven rate hikes not for a while because now the central bankers are scared because of the war and that is one reason that I suspect we are going to have a big rally before too much longer,” says Jim Rogers, Investor and Author, Street Smarts: Adventures on the Road and in the Markets.
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