New era Technology Bubble
S&P 500 index has hit beyond 1600 at last Friday, this leading indicator is now at its historical high record. On Tuesday night, another important indicator, the NASDAQ composite index, has hit beyond 4000 points! A round number cornerstone before it reaches 5000 points, the historical high of NASDAQ composite index. What are this two events hint us about? Although NASDAQ is not in its historical high index but it is at least at the highest since the last technology crash. As you may know, NASDAQ is the leading indicator for U.S. Technology Company, main companies listing in NASDAQ constitute of Google Inc., Microsoft, Facebook, Twitter, Apple, Amazon, Yahoo, etc.
We extract a chart from yahoo finance to compare within the S&P 500, Dow jones and NASDAQ. It’s clear that, the NASDAQ composite index roses far more than S&P 500 and Dow jones industrial average. In fact, the NASDAQ index has been pushed up a lot by the technology typhoons like Google and Apple, and recent IPO activities of social media like Facebook and Twitter. We see the technology sector has rallied so far, beyond all the traditional business that largely constitutes the Dow and S&P 500 index. What make us think on this is, the another technology crisis might be brewing quietly.
Since the last decade of technology boom, the rose of personal computer, brought up the technology market together with the sub- industry including the hard-disk maker, and the software maker, and then, the dot-com. While the old technology is making its concession, the contemporary technology boom is revolving around a new technology trend- the smartphone. With the social media becoming more popular in use, the online business sector is quickly gaining the rise. The courier service, an important service from the online shopping as well as the mobile apps sector is echoing the trend.
In Malaysia, we can notice the parts supplier for the world leading smartphones and tablets provider is pioneering the local technology index, such as Gtronic and Inari. With the government’s interest and implementation of the E-government and E-payment into the government and tax sector, the service provider of the related field will become the main beneficiary, and many of them are listed as the technology counter. Company like Censof, GHLSYS and MYEG are gaining attention from market and their market price are sky-rocketed, and they are all software and system service provider for online payment software.
In fact, in Malaysia we are lagging the technology trend of the world, but is now begins to catch up with the mega trend. As you may notice, we are covered with hot technology issues day by day, the technology products and services are becoming popular, yet our technology index is far lower comparing to other sector. If you notice our market closely, you will notice the market is pursuing the technology counter, as today, some of the active traded stock is, namely, EAH, Vitrox, Solutn and XoX, these are all from the Ace market. Remember our technology index still retarding far behind from the world’s market, if this lagging is going to catch up with the global technology market, which stock will be the next market black horse? We believe that the financial result releasing on this November will tell…