” ahead of a possible recession and as liquidity dries up amid rising interest rates, CNA previously reported.
For instance, the tech-heavy Nasdaq has lost almost 18 per cent year to date, versus the 11 per cent decline in the S&P 500 and 9 per cent in the New York Stock Exchange Composite. The precipitous drop in some of these highest-growth tech stocks also signalled growing wariness among investors about companies that are not yet able to turn a profit.
While the large declines may represent a buying opportunity, investors “should remain cautious in the current uncertain economic environment”, he added.Using the example of Shopify, it noted that while the stock may be looking like “a clear-cut bargain” after the selloff, there is the risk of “rapidly decelerating growth” given how e-commerce players will have to cope with challenges such as rising shipping and logistics costs.
“Catching the bottom for these two stocks will be difficult, but Sea looks to already be trading below what is justifiable vis-a-vis peers, while Grab is still at a premium,” he told CNA. But both e-commerce and gaming are “well-proven and very sticky business models” in the long run, added the Maybank Securities equity analyst, who has a “buy” call and a target price of US$105.For Grab, Mr Tan said the tech company’s shares may see “a short-term uplift” on the back of positive sentiment for its ride-hailing business as economies reopen and adjust to life with COVID-19.
Losing steam definitely.
South