Electronics manufacturers climb as China eases pressure on materials

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Shares of electronics firms rose despite a broader market dive on Friday, led by KCE Electronics (KCE) and Hana Microelectronics (HANA), based on declining steel prices as China has ramped up output to control commodities prices and curb speculation on pandemic recovery.

KCE jumped by 4.56 per cent to 73.75 baht before settling at 72 baht, still rising 2.49 per cent by mid-day, accounting for the fourth-biggest transaction value of 1.36 billion baht during the morning session.

HANA also shared the ride by rising 3.77 per cent to 68.75, then falling back to 66.50 baht, up 0.38 per cent. The transaction value amounted to 1.51 billion baht, the third biggest of the session.

China will continue to discharge metal stockpiles, including copper, aluminum, and zinc, in a bid to ease the threat posed by increasing raw material prices to its industrial sector, according to Nomura Securities.

The cheaper prices for metals mean lower business costs for the electronics chip manufacturers, resulting in positive sentiment toward KCE and HANA, the analysts said.

Nomura has given a ‘Speculative Buy’ rating to KCE given its bullish outlook from fully booked capacity until November, with and earnings projection of 599 million baht in the second quarter and 2.2 billion annually.

Despite the overall index of the Stock Exchange of Thailand falling by 12.15 points, down 0.75 per cent by mid-day break, the electronic components firms index saw a rise of 104.75 points, up 1.44 per cent.

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