The Redux Global ICT 100 Index (R-100), our uniquely representative index of global technology shares, was down 0.6% in the trading month of January 2006. Having finished at 1077.81 at the end of 2005, it fell to 1071.40 as of 03 February, 2006. This appeared to belie tales of telco meltdown in regions such as Europe: while this did occur, it was compensated for by gains elsewhere.

Thus Europe was down by 2.1%, on the back of heavyweight carriers such as France Telecom and Deutsche Telekom leading the index due south – after FT’s reported worries (click here) — spread negative sentiment across the region’s PTOs. This was mitigated to an extent by vendors such as Siemens, Philips and Alcatel which showed a rebound after some weeks of decline.

Nevertheless, a shaky European telco sector, with a majority of stocks falling in the trading period, does not bode well for the future. Eyes are already being trained on next week’s 13 February announcement by France Telecom as to how it intends to address the underlying effects of two profit warnings in short succession (for details, click here).

In North America, the R-100 basket of 40 companies was down 2.5%. Bellwethers such as AT&T (SBC), Sprint-Nextel and Intel, plus Internet stocks like Amazon, EBay,Google and Yahoo! shed tens of billions of dollars in market cap but gainers like Qualcomm, HP, Microsoft, Cisco, Verizon and BellSouth helped to claw back most of the losses.

Bucking these trends, Asia-Pacific stocks in the R-100 were up 2.56%. Leaders for the trading period included Japanese vendors such as Advantest, Fujitsu, Matsushita and Sony, as well as Korea’s Samsung, with most other companies in the region remaining relatively static.

This month’s regional see-saw is not a new event for the R-100. The pronounced patterns of ups and downs within each region is unusual – hinting at a fluid market for ICT shares after months of knee-jerk price movements. We’ll find out more on 26 February: past experience suggests a regurgence in at least two of the three regions.
Jim Chalmers