Wednesday, 1 July 2009

Share indices in June 2009

(By Anthony Miller – Wednesday 1st July 2009 10:30am). Though tech stocks once again outperformed the FTSE 100 in June – for the sixth consecutive month – this is really a case of being ‘less worse’. Last month the UK FTSE SCS index crept down 2% vs a 4% drop in the FTSE 100. Hardware was the tech star, up nearly 9%, though the telco sector was the best all-rounder, with ‘fixed line’ up over 9%. The contrast between tech and the rest is even starker since the beginning of the year. The FTSE Hardware index is up 66% ytd, SCS up 34%, and overall IT up 40%, all vs a 4% decline in the FTSE 100. We almost tire of warning of the parallels with pre-dotcom valuations.

The highest flier in June among the FTSE SCS index stocks was Phoenix (+38%) which pleased the market with its FY results (see Phoenix rises). Kofax also did very well (+21%) despite a downbeat trading update in May (see Gloomier news from Kofax). On the down side, RM fell steepest (-9%) among the SCS index players.

Phoenix was also top performer for the month among all the UK SITS stocks that we track, with BPO player Mouchel getting the wooden spoon (-34%) after an unexpected warning as its consulting business turned pear-shaped (see Mouchel ticks the wrong boxes). Peers Capita and Xchanging remained pretty much flat, though Serco beat them all (+5%).

Best performer among the US tech stocks we track was Dell (+19%) with Microsoft up 14%. IBM was the ‘worst’ performer, though ‘only’ losing 2% in the month. Best European was banking software firm Temenos (+11%), whose major client event we covered last month (see Notes from Monaco). We will be publishing our Cloud in Banking Sector AnalystViews note later this month from research we gathered at the Temenos event. Worst European performer was troubled Netherlands-based SI, Ordina. But the star prize goes to the India-based players, with Tech Mahindra up 54% and Satyam’s ADR up 47% (local stock up 33%). Watch for much more on all the major Indians over the next few weeks as reporting season kicks in.

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