AS trading in the stock market continues to be choppy due to Covid-19, as well as a global economic slowdown, technology companies seem less vulnerable to the pandemic and economic situation.
eToro, a social trading and multi-asset brokerage company, said based on new data on its investment platform, nine out of the top 10 invested stocks by Malaysians last month were technology companies.
“With a 19% increase in Malaysian investor buys compared with March, Tesla Inc became the most popular choice of stock on eToro as it rose from fourth to first place in April,” its senior market analyst Nemo Qin said.
He said American semiconductor multinational Advanced Micro Devices (AMD) remained a popular stock in April with a 114% increase in trading.
“Investors realise that amidst the stay-at-home economy, there would be a surge in demand for the company’s central processing units and graphics processing units that are used in laptops and data centres,” he said.
Qin said during an economic downturn, investors prefer to invest in consumer staples or dividend aristocrats than other sectors.
“However, it seems that the interest in the technology sector has not only remained, but technology stocks have increased in popularity among investors during the pandemic,” he said.
Citing a few reasons why technology stocks are popular among investors, Qin said these companies have successful business models or healthy financial status that allow them to continue supporting their development and business operations.
“Another reason is, people are spending more time on technology products, be it using streaming services, e-commerce, video games, online fitness, e-learning, and working from home.
“And many technology companies such as Netflix and Zoom are recognising these trends and seizing these opportunities to generate more income and revenue,” he said. — May 6, 2020, Bernama
