Tech sector to continue outperforming peers in medium-, long-term
26 Jan 2021
The technology (tech) sector is expected to continue outperforming its peers in the medium- to long-term, propelled by the rise in the adoption of tech devices, as well as the unsettled United States (US)-China trade spat.
Describing the tech sector as a secular story, UOB Asset Management (M) Bhd (UOBAM) chief investment officer Francis Eng said the integration of tech devices such as smartphones in everyday life would drive up demand for the devices.
“That may benefit many Malaysian tech manufacturers,” he said in a virtual media briefing today.
Apart from that, Eng said the unsettled US-China trade tiff bodes well for the local tech sector due to the trade diversion, although tensions are expected to de-escalate under the newly elected US President Joseph Biden’s administration.
“We think the (de-escalation mode in the) US-China tension will continue, and trade diversion — where investors diversify their supply chain (due to the trade war) — will continue.
“That will continue to benefit Malaysia’s tech sector, and the outlook for the sector remains promising,” he said.
He noted that tech stocks had performed well in 2020, being one of the sectors that had led the local equity market’s rally last year.
Echoing Eng’s views, UOBAM chief executive officer Lim Suet Ling said awareness about clean energy, such as electric vehicle (EV), helped to boost the tech sector.
“We are not taking about the car or the battery itself, but the EV component producers such as the semiconductor or censors,” she said.
During the media briefing, UOBAM had also launched the United-i Asia ESG Income Fund, its first Shariah-compliant environmental, social and governance (ESG) fund to help retail investors benefit from sustainable investments.
In a statement today, the company said the fund invests in a diversified portfolio of equities and debt instruments issued by companies across the Asian region (excluding Japan) that comply with Shariah principles and adopt ESG considerations into their business models and practices.