Tech stocks retreat from early highs, ending year lower

TECHNOLOGY stocks were lifted by a wave of private equity buyouts earlier this year that sent their prices soaring.

But when it became clear that not all the companies would be picked up by buyers, market values retreated from the dizzy highs, with many tech stocks ending the year lower.

Among the highest profile takeovers was that of precision engineering firm MMI Holdings.

MMI was delisted from the Singapore Exchange in July after it was bought for $1 billion by US private equity giant Kohlberg Kravis Roberts & Co.

Meanwhile, Stats-ChipPac was the target of a $2.8 billion takeover bid by Temasek Holdings, which sent its share price sharply higher in March.

When its offer closed in May, Temasek gained control of 83.1 per cent of Stats but fell short of the 90 per cent it needed to take the company private.

Stats was subsequently removed as a member of the blue-chip Straits Times Index but remains listed, although Temasek has suggested it will continue to buy more Stats shares in the open market and try to take it private.

Partly as a result of the boost to its share price from the takeover bid, Stats' market cap swelled 39.8 per cent in 2007 to finish at $3.28 billion.

But other tech stocks did not fare so well.

Chartered Semiconductor Manufacturing saw its market cap fall 24.5 per cent to $2.45 billion, mainly due to a plunge in its share price after it reported a second-quarter loss.

Despite a stronger-than-expected Q3 earnings report in October, the share price has not recovered.

Creative Technology also saw its market value dive. It finished the year worth just $668 million, down 23.2 per cent from a year ago. Meanwhile, electronics contract manufacturer Venture Corp saw its market cap dip 4.6 per cent to $3.51 billion.