Tech sector's outlook seen muted-OCBC

OCBC Investment Research said Singapore technology companies have generally reported lacklustre results for the second quarter of 2012 and their outlook is uncertain with headwinds
such as weak order visibility and rising cost pressures.

Previous expectation of a robust sequential recovery in the seasonally stronger second half have dwindled in the past few months due to uncertainties over the euro zone crisis, as well as sluggish economic growth in the United States and China, OCBC said.

But OCBC said a bright spot during the quarter came from “decent” dividends declared by some technology companies, supported by their balance sheet strength and management’s commitment to reward shareholders with regular dividend payouts.

The expected launch of new programs and products such as ultrabooks, Microsoft’s Windows 8 operating system and Apple’s iPhone 5 could help to buffer some of the near-term weakness,
OCBC added.

OCBC’s top pick in the sector is Venture Corp. It also covers ECS Holdings, Karin Technology Holdings and Micro-Mechanics Holdings.