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Software industry

Asian Technology Stocks Poised for Growth in Fourth Quarter

Strategic Insights

— 1 min read

Fourth-quarter growth has been a hallmark for Asian technology stocks, with the industry average rising by 10% since 1996. This year's trend may continue due to the upcoming launch of new products, including Microsoft's Windows Vista, Nintendo's Wii, and Sony's PlayStation 3. Key players like Quanta Computer, NEC Electronics, and Toshiba are likely to benefit from the increased demand. As investors, it's essential to position themselves for the next boom in the industry.

Key Takeaways:

  • Since 1996, the Morgan Stanley Capital International Asia-Pacific index has gained an average of 10% in the fourth quarter.
  • Last year, the technology industry index climbed 17%.
  • Microsoft is scheduled to start selling Vista to companies next month and to households in January.
  • Computer upgrades are likely to occur as a result of the new operating system.
  • Quanta Computer, the world's largest maker of notebook computers, may benefit from the increased demand.
  • NEC Electronics and Toshiba, suppliers of semiconductors for the Nintendo Wii and Sony PlayStation 3, respectively, stand to profit from the upcoming players.
  • Acer, the largest PC maker in Taiwan, has seen sales climb 21% in August from the previous month, according to a report released on Saturday.
  • Barro Liao, who manages investments at PCA Securities Investment Trust in Taipei, believes electronic makers are waiting for a catalyst to spark demand and that the new products will do just that.
  • Kent Chan, Citigroup's Hong Kong-based Asian technology strategist, advises investors to look for pullbacks in shares as an opportunity to position themselves for the next up-cycle in PCs.

Statistics:

  • Average fourth-quarter gain for technology companies in the Morgan Stanley Capital International Asia-Pacific index: 10%
  • Fourth-quarter gain for technology industry index in 2006: 17%
  • Microsoft Scheduled to start selling Vista: next month (companies) and January (households)
  • Acer's sales for August: 30 billion Taiwan dollars (approximately $907 million), up 21% from July
  • Quanta Computer's share price: gained 20% this year
  • Acer's share price: fallen 31% this year

Sources:

  • "Barro Liao, who manages investments at PCA Securities Investment Trust in Taipei"
  • "Kent Chan, Citigroup's Hong Kong-based Asian technology strategist"
  • "Microsoft is scheduled to start selling Vista, the first new version of Windows since 2001" (Microsoft official announcement)
  • "Acer's sales for August climbed 21 percent from July to 30 billion Taiwan dollars" (Saturday report released)
  • "The Morgan Stanley Capital International Asia-Pacific index"

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