02 June 2011

† UNISEM: Time For Revival? †

UNISEM, a company listed on The Main Board of K.L.S.E and also a world class semiconductor assembly.

UNISEM has recently dropped so badly like a waterfall. The effect of the weakening dollar against emerging market currencies will make it less attractive for semiconductor companies to outsource. Since most Malaysian semiconductor companies depend on outsourcing contracts from major integrated devices manufacturers from the US, these companies may lose their competitive edge in the longer term if the rising trend of the ringgit is not reversed. In short, drop of US dollar = drop of UNISEM value.

Fundamental analysis has shown decline in the revenue by 11.9% compared to last year. This may be a sad case to most buyers but look at the bright side, the narrowing of Bollinger Bands, low RSI and the rising trend of MACD as shown in the technical analysis diagram above might show a possibility of positive turning.

UNISEM, a ball that bounces back or a knife that cut through your hand when you hold it? If I can give you an answer here, I'll be definitely a God. Nobody knows the future. In the longer run, if the US dollar stays at this level, it might be a difficult situation for UNISEM to rise. The bad/good news is that, the rise of Malaysian Ringgit is not expected to slow down that soon. Hence, companies like UNISEM which trade in dollar terms should buckle up for a more challenging future.

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