Electronic stocks faced a sell-off on Monday as investors feared that the Ukraine-Russia crisis would disrupt global supply chains, resulting in a shortage of electronic components.
The share price of Delta Electronics (Thailand) Public Company Limited (SET: DELTA) dropped THB15.00/share or 3.73% to THB378.00/share, with a trading value of THB584 million.
The share price of Hana Microelectronics Public Company Limited (SET: HANA) dropped THB1.00/share or 1.64% to THB60.00/share, with a trading value of THB731 million.
The share price of KCE Electronics Public Company Limited (SET: KCE) dropped THB0.75/share or 1.26% to THB59.00/share, with a trading value of THB2,193 million.
KTBST Securities (KTBST) has a bearish view on the electronic sector, citing concerns that the Ukraine-Russia crisis has the potential to cause widespread and debilitating disruption across global supply chains, given that both countries are major suppliers to the global electronic market. According to Techcet research, 90% of semiconductor grade neon gas in the US comes from Ukraine and 35% of palladium is imported from Russia, the two important materials used for making chips.
This conflict has the potential to erode share prices in the electronic sector, as supply chain disruptions would result in chip shortages. If the conflict escalates to war, oil and consumer goods prices will rise, fueling inflation and the Fed’s rate hike decision.
Hence, KTBST recommends traders to avoid electronic stocks in the near term.