Malaysia’s ATA falls as analyst airs concern after Dyson rift -Breaking
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Liz Lee and A. Ananthalakshmi
KUALA LUMPUR – Shares of Malaysia’s ATA IMS increased on Tuesday, following a Dyson decision to cut ties last week over allegations of forced labour. Meanwhile, a research firm raised questions about its ability add customers.
ATA receives 80% its revenue from Dyson. It reiterated Monday that it takes the accusations seriously, and that results from a Labour Audit were inconclusive. It warned that revenue would decline and that costs will be cut.
AmInvestment Bank stated that the firm which produces parts for Dyson vacuum cleaners or air purifiers faces significant operational risk and would be difficult to sell to new customers in the near future.
It stated in a research paper that “ATA might not be the most favourable place to negotiate with new customers.”
We believe that ATA will struggle to recover from its current crisis. This is exacerbated in part by the labor shortage crisis.
ATA stated this month that it could not recruit foreign workers due to coronavirus curbs.
The shares of Dyson fell by 27% Tuesday before a reversal. Since Dyson’s termination, it has seen its value drop by nearly two-thirds.
Two additional ATA customers told Reuters that they are watching the accusations.
Ecobee is a manufacturer of Wi-Fi enabled thermostats. It said that it had been made aware of these allegations and was currently reviewing the information in order to determine its next steps.
Cricut Electronic Craft Machines, which manufactures them, stated that they took the allegations very seriously and were monitoring the matter to determine if any further action was necessary.
France’s Sagemcom (a manufacturer of communications devices) signed up late in 2019 as an ATA client. However, it said that the Malaysian company had cut ties this year “due to the supplier’s inability and shortcomings”
The document did not specify the standards that ATA failed to meet.
ATA has not yet responded to a request for comments.
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