S&P/ASX 200 Information Technology Index UPDATE

 

The S&P/ASX 200 Info Tech Index aims to provide a sector benchmark. The latest rebalance of the index by Standard & Poor’s includes nine companies [1] with the total market capitalization of about A$21 Billion. The index is skewed toward three companies (Computershare, Link Administration and Carsales.com) that make up about 60% (in 2016) – 65% (in 2017) of the total index capitalization.

webASX200InfoTechMay2017 cap

 

Over the past 12 months, three companies - Computershare, Altium and Nextdc - lifted their share prices by about 30%. Data centre provider NextDC was added to the index in September 2016. The company grew its revenue - up 52% from $58.7M to $89.3M. Software company Altium increased its presence in EMEA and China - 14% and 27% revenue growth respectively [2]. Share registry Computershare expects to benefit from anticipated interest rates raises. The company also targets US$85-US$100 savings through a range of operational improvements, including process automation, better procurement and more effective measurement & management of organizational productivity [3].

 

On the other hand, Aconex (cloud collaboration/ project management platform) and iSentia (media analytics) showed the worst share price performance. Aconex reported an increase in operational expenses and failed to generate profit. iSentia’s results were negatively affected by performance of its Content Marketing business that “lost revenue momentum due to decisions made in regards to strategy, new business development and client retention” [4].

Standard & Poor’s (S&P) publishes a factsheet with key statistics related to the S&P/ASX 200 Info Tech Index [5]. A snapshot of the index performance is provided on Market Index website [6].

 

References & additional info

[1] S&P/ASX 200 Information Technology Index was launched in 2002. It is rebalanced quarterly. A list of companies included in the index can be downloaded from this website -> www.asx200list.com

[2] Altium Half-Year Report, February 2017

[3] Computershare, Investor and Analyst Briefing, April 2017

[4] iSentia 2016 Annual General Meeting, November 2016

[5] au.spindices.com/indices/equity/sp-asx-200-information-technology-sector

[6] www.marketindex.com.au/asx-sectors

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