THE Australian IT sector produced another dismal performance over the past 12 months, according to Commonwealth Securities.
The CommSec IT 100 Index, which tracks the value of Australia’s main IT and Internet companies, fell by 40 per cent over the past year.
This was even worse than the 31 per cent fall in the NASDAQ Index, which tracks the value of many US technology companies.
By comparison, the All Ords index was down just 5.5 per cent and the US S&P500 index was down 16.7 per cent.
Two of the biggest losers in the IT sector were KAZ Group, down 78 per cent, and Perth-based ERG, down 76 per cent.
Other stocks suffering a big decline were Keycorp, down 59 per cent, and Infomedia, down 53 per cent.
CommSec doesn’t see much blue sky on the horizon. It anticipates further tax loss selling by investors leading up to 30 June (so that investors can realise capital losses to offset against their capital gains). Changes to ASX indices by Standard & Poor’s are also likely to cause the share prices of some IT companies to weaken in the short term, CommSec said.
Effective from the close of trade on June 28, Altium will be removed from the S&P/ASX 200 Index.
Additionally, on October 1, when the ASX indices move to a free-float basis, MYOB and Intellect Holdings may be removed from the S&P/ASX 200 Index.
The largest companies in the CommSec IT 100 index comprise Silex Systems (with a market capitalisation of about $330 million), ERG, Infomedia, Vision Systems and KAZ.
