Electronics distribution, connector markets face macro-economic headwinds

October 10, 2008

Investment bank Deutsche Bank recently lowered its estimates for the connector and distribution industries to incorporate the recent decline in the euro and dollar exchange rate, higher borrowing costs and slowing macro-economic environment.

The bank believes many investors are currently overlooking the impact from Forex (over-the-counter markets) particularly for companies like Arrow, Avnet, and Tyco Electronics who record more than 30 percent of their sales in euros / British pounds.

In addition, the bank feels the outlook for almost every technology end market has deteriorated over the past quarter (auto, handsets, personal computing, IT infrastructure, communications infrastructure, etc), and will likely get worse before it gets better given its cautious view on the global consumer (housing market, unemployment, tighter credit) and discretionary technology spending by corporations and carriers.

Source: Deutsche Bank