Monday, 1 December 2008

Share indices in November

(By Richard Holway) The tech indices that we follow have been volatile to say the least. As you can see from the table below, further declines were recorded for the month of November as a whole. EVERY index is now showing a 30%+ decline for 2008 YTD. The exception, in November, were the telecommunications indices which staged a pretty impressive recovery. However, the Fixed line Index is dominated by a small number of companies. BT was up 17.5% and C&W up 22% in Nov. The Mobile Index is dominated by Vodafone - up 5% in Nov. All these companies, at last, showed signs of facing up to the magnitude of the problems ahead.

Amongst the larger SITS stocks, Dimension Data was the best performer (up c19% in Nov) and Aveva (down c33%) and Computacenter (down c27%) amongst the worst.

It’s worth noting that my favourite ‘Boring’ company – Capita – managed a 9% rise in Nov. Capita is in the Support Services Index. Capita is unchanged YTD which is a quite remarkably good performance given the 34% decline in the FTSE100.

The situation would have been very different just a week ago. The last week has seen a strong recovery in all tech related indices. Indeed all of them are up around 10% in the last week. I would caution any reader who might believe that this is the end of the tech misery. As I have reminded readers countless times before, in all previous downturns our indices just kept on falling for two or three years. But, there are always periods of short term ‘recovery’ – just as we have seen in the last week - to catch out the uninitiated.

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