By V. Phani Kumar
Technology shares in Asia got a big bump up Wednesday after chip
giant Intel Corp. trounced second-quarter estimates, with
personal-computer and hardware-component makers staging an
especially strong rally.
Intel (INTC) shares soared more than 7% in after-hours trading
overnight, after it swung back to profit, reported a robust 34%
jump in quarterly sales and issued a forecast that exceeded Wall
Street's expectation, in the process easing worries about the shaky
global economy.
A number of computer-hardware stocks had suffered recently due
to uncertainty over demand for personal computers.
"While demand visibility remains low at this moment, we believe
the current price level of personal-computer related stocks has
already factored in market's low expectations on [second-half of
2010] growth outlook," Citigroup analysts led by Eve Jung wrote in
a note.
"We expect Intel's stellar [second-quarter] results and positive
second-half outlook to support prices of PC names. We continue to
like Acer, Asustek and Lenovo, given their solid growth outlook in
China's PC market," they said.
Among Asian computer makers, Lenovo Group Ltd. (LNVGY) climbed
5.9% in Hong Kong, while Toshiba Corp. (TOSYY) gained 4% and Sony
Corp. (SNE) rose 2% in Tokyo. In Taipei, Acer (ACEIY) jumped 6%,
Asustek Computer (AKCPF) added 3.3%, and in Mumbai, HCL Infosystems
climbed 0.4%.
Some analysts remained cautious, however, with BofA Merrill
Lynch analyst Masashi Kubota saying that while Intel results may
provide a short-term relief to the market, the demand trend in PCs
will need to be monitored closely for the rest of the year.
"PC shipments in the first half of third quarter will be
seasonally strong. On the other hand, Taiwanese PC original-design
manufacturers are saying that motherboard shipments in June were
weak again, so we should not be overly optimistic on the PC demand
outlook," Kubota wrote.
Kubota said that although electronic-component makers were also
likely to benefit from Intel's results, unless PC demand forecasts
were raised, the component makers' earnings and share price will
continue to be driven by "supply-side issues" such as capacity
increases or inventory restocking.
Among component makers, shares of Shinko Electric Industries Co.
(6967.TO) gained 4.2% and Ibiden Co. rose 3% in Tokyo, with
Advanced Semiconductor Engineering (ASX) adding 3% and Siliconware
Precision Industries Co. (SPIL) advancing 1.5% in Taipei.
In wider Asian markets, Japan's Nikkei Stock Average climbed
2.5% to 9,774.47, Taiwan's Taiex, Korea's Kospi and Australia's
S&P/ASX 200 each gained 1.5%, China's Shanghai Composite
advanced 1.2%, Hong Kong's Hang Seng Index gained 1% and India's
Sensex rose 0.8%.