Affin Daily Insight (LV) - 23 April 2014 - TECHNOLOGY / DMR

Top Calls

Sector Update � Technology (OVERWEIGHT, maintain) - Positive global sentiment should help sustain upturn We maintain our OVERWEIGHT rating on the Technology sector. Going forward, we believe that the global SIA will likely to continue its upcycle momentum into 2014 due to improving sentiments in global economies and still robust demand from emerging markets. We think that the communication segment will continue to remain exciting, mainly due to the still growing smartphone market. In our view, based on the low smartphone penetration rates in China and other emerging markets, we believe there is still ample room for growth in this industry. We also expect the replacement cycle for smart device will also take place in 2014 thus supporting growth in this segment. Although P/E and P/B multiples for our semiconductor companies are looking expensive (valuation surpassed their +1SD), nevertheless, valuations are no longer comparable to its historical trend. This is largely due to a positive structural shift in earnings visibility and quality of our semiconductor companies to be underpinned by stronger earnings prospects. Top picks for the sector are Inari (BUY; TP of RM3.33), MPI (BUY; TP of RM6.44) and Globetronics (BUY; TP of RM4.01).

Other Calls

Debt Market Research - A tad more active despite weakening MYR, especially for PDS

Morning News & Market Summary

For important disclosures, please refer to the Disclosure section at the end of the individual linked research reports.

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