U.S.-traded shares of technology companies based in emerging markets fell sharply on Monday, with Spreadtrum Communications Inc. taking the biggest hit after a Roth Capital Partners analyst downgraded the wireless chip maker, predicting weakening sales for the Chinese company.
In a note to investors, Jay Srivatsa cut Roth to "Hold" from "Buy." Srivatsa said many Chinese handset companies have seen weak shipments since mid-April, due to slower demand and a weaker economy.
"While the month of June could see some modest bounce back, we believe June sales could be insufficient to enable Spreadtrum to meet its (second-quarter) revenue guidance," Srivatsa said.
The analyst cut his price target to $9 from $12. Spreadtrum ADRs plunged $1.59, or 17 percent, to $7.77. Other emerging markets-based technology companies also fell.
Taiwan's Silicon Motion Technology Corp. lost 58 cents, or 2.9 percent, to $19.60. Taiwan Semiconductor Manufacturing Co. slipped 44 cents, or 3.7 percent, to $11.17. China Techfaith Wireless Communication Technology Ltd. gave up 13 cents, or 2.8 percent, to $4.54. Taiwan-based United Microelectronics Corp. lost 10 cents, or 2.4 percent, to $3.21. Israel's NICE Systems Ltd. declined 38 cents to $33.40.
Meanwhile, the Bank of New York Emerging Markets ADR Index _ which tracks shares of companies based in China, Chile, Brazil and elsewhere _ lost 3.28 points, to 365.53.
The Bank of New York Composite ADR Index gave up 1.13 points to 175.81.
ADRs, or American Depositary Receipts, are securities that allow U.S. investors to trade shares of companies based overseas.
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