Electronic Index Gains 3% as China Dumps Copper-Aluminium to Curb Rising Commodity Prices

The Electronic Components Index (ETRON) increased 266.31 points or 3.67% to 7,531.10 points as of 11:17 local time in Thailand, led by KCE Electronics (KCE). The share price rose 4.63% or ฿3.25/share to ฿73.50/share, with a trading value of 4,054 million baht.

Followed by Delta Electronics (Thailand) (DELTA), the share rose 3.77% or ฿20.00/share to ฿550.00/share, with a trading value of 572 million baht.

Cal-Comp Electronics (Thailand) (CCET) rose 3.51% or ฿0.12/share to ฿3.54/share, with a trading value of 49 million baht.

Hana Microelectronics (HANA) rose 2.26% or ฿1.50/share to ฿67.75/share, with a trading value of 1,008 million baht.

According to Capital Nomura Securities (CNS), China’s National Development and Reform Commission (NDRC) has stepped up its efforts to contain a commodities price spike by continuing to release national reserves of copper, aluminum, and zinc. As a consequence, copper and aluminum prices plummeted 3.64% and 2.81%, respectively. Even so, CNS considers it as a driver for stocks such as KCE and HANA.

Due to KCE’s solid operating outlook, CNS recommends a “Speculative-Buy.” Earnings are predicted to reach 559 million baht in 2Q21, an increase both year over year and quarter over quarter. While full-year net income would be 2.2 billion baht, up 103% year on year, as sales volume climbed 28% in 2021 and profit margins improved.

KCE will also benefit from its inclusion in the SET50 Index and China’s new regulations aimed at limiting the price surges of some commodities (including copper price).

Meanwhile, Asia Plus Securities (ASPS) emphasized that as international currencies, particularly the US dollar, continue to weaken, this will be a positive sentiment for export-oriented sectors such as electronic stocks (KCE, DELTA and HANA).