Electronics to benefit from currency woes<\/p>\n
SINGAPORE (AFP): Southeast Asian electronics firms are
\nbenefiting from the regional currency crisis since they earn US
\ndollars and weak local currencies cut operating costs, an
\ninternational investment house said yesterday.<\/p>\n
"I think electronics companies as a whole are net
\nbeneficiaries in the currency crisis," said Pearly Yap, research
\nmanager at SocGen-Crosby Securities Pte. Ltd., a subsidiary of
\nFrench bank Societe Generale.<\/p>\n
"Southeast Asia is highly dependent on demand from the U.S.
\nand Europe. If you look at Singapore alone, exports to the U.S.
\nand Europe make up 53 percent of total electronics exports," she
\nsaid at a media briefing on the industry.<\/p>\n
Yap predicted a synchronized recovery in the Group of Seven
\n(G-7) industrial economies and said that with Southeast Asian
\nelectronics companies earning in U.S. dollars, "there's no real
\nimpact" on the industry from the currency crisis.<\/p>\n
"They would also have benefits from lower operating costs with
\nweaker currencies," she said.<\/p>\n
"Of course we are referring to companies that are really
\nselling to the global marketplace," Yap said.<\/p>\n
"I think there are some Malaysian companies which are selling
\nconsumer products to the Malaysian market. Those will be probably
\nhit," she added.<\/p>\n
Southeast Asian currencies have fallen sharply since the Thai
\nbaht's de facto devaluation on July 2 set off a regional currency
\ncrisis, but regained lost ground this week on expectations of
\nreforms that would boost confidence.<\/p>\n
Yap said that in the Singapore stock market, the highest
\ngrowth opportunities come from the electronics sector, despite
\nlingering skepticism following the severe slump in 1996 which
\neased only in the middle of this year.<\/p>\n
SocGen-Crosby made bullish forecasts, particularly for
\nsemiconductors, despite a slowdown in Singapore's electronics
\noutput growth in August, which other analysts saw as signs of a
\nbumpy recovery.<\/p>\n
Yap said there was still some "overhang" from last year's
\nslump but predicted that electronics stocks will outperform the
\nrest of the Singapore stock market in 1998.<\/p>\n
Singapore is the world's biggest manufacturer of computer hard
\ndisk drives and a major exporter of semiconductors.<\/p>\n
Worldwide demand for electronics will be propelled in 1998 by
\naggressive product innovation led by U.S. chip giant Intel Corp.,
\nthe G-7 recovery, and rising semiconductor content in electronic
\nproducts, Yap said.<\/p>\n
Semiconductors will be the "most positive segment" of the
\nmarket, Yap said, predicting 9.5 percent revenue growth for 1997
\nagainst a nine-percent fall in 1996, and 22-25 percent growth
\nbeyond 1997.<\/p>\n
She said global billings of Singapore semiconductor firms rose
\n15.3 percent in August, when the electronics industry's output
\ngrowth was only 3.7 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/electronics-to-benefit-from-currency-woes-1447893297",
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"sponsor": "Okusi Associates",
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