It was hardly an electric performance from the electronics sector in 2009, but then again, it wasn't a particularly shocking one either. The 23 per cent gain was marginally lower than the wider FTSE 350, and in fact would have looked substantially better were it not for the troubles at Laird. The mobile antennae manufacturer started the year battling against massive destocking by its customers, clawed its way back as the supply chain thawed over the year, only to see shares come crashing back to earth after it pushed through a £90m rights 1-for-2 rights issue in November.
Tip of the year Renishaw also had a year to forget - exposure to the automotive industry saw demand for its precision measurement technology slump and forced it to take extreme cost-cutting action. Renishaw recently said that although trading has been improving each month, it was still well below the level seen before the downturn struck.
That chimes with global manufacturing surveys, which have shown several months of gradual improvement. But output is likely to remain way below its 2007 peak this year, and although the likes of Renishaw and Spectris will benefit from an increase in automotive output, much manufacturing capacity will nevertheless remain idle. That means investment in new equipment is likely to remain subdued, and the sector, which is highly geared to manufacturing, is unlikely to see a repeat of the gains seen in 2009.
However, there will be patches of growth. Laird should see improvement this year, with technology researcher Gartner predicting the global mobile handset market to grow 9 per cent this year as demand for smartphones increases. And demand for sophisticated electronics for high-end medical and aerospace applications will remain steady, to the benefit of Morgan Crucible. Most companies in the sector finished 2009 with relatively healthy balance sheets, so it's likely that in the absence of strong organic growth many will be looking to buy into more robust niches. It's a strategy that's certainly worked well for Chloride, which should also see demand for its uninterruptible power supplies stay strong.
Electrical & electronic equipment
Alternative energy
| NAME | TIDM | Price p | Mkt val £m | PE | Yield % | 1 yr perf % | LAST IC VIEW |
|---|---|---|---|---|---|---|---|
| PV CRYSTALOX SOLAR | PVCS | 61.4 | 256 | 3.5 | 8.4 | -38.6 |
