After four consecutive months of growth, the Redux Global ICT 100 Index (R-100) lost 4.1% in the four weeks to 28 January, 2005. It fell to 985.02, compared to 1027.06 at 31 December, 2004, taking it back to levels last seen in mid-November 2004.

Within the 4.1% fall, the European stocks fared best, with a collective loss of just 1.1%. The handful of European gainers included Telekom Austria, Elisa, KPN, Telenor and Telefónica Moviles with UK operators BT, mmO2, Cable & Wireless and COLT all in positive territory.

In Asia, the fall was 3.5%; only China Telecom, China Unicom, Telstra and SingTel showed gains, alongside the Korean manufacturing heavyweights LG Electronics and Samsung.

Of the 40 shares included from North America, just four —Apple Computer, AT&T, BCE and LSI Logic —made any headway. Overall, the US and Canada contingent fell by 6.1% in the period.

It is instructive to compare the performance of the US R-100 companies against their parent indices and the result is perplexing.The 20 Dow Jones shares included in the R-100 fell by 6.9%, against a fall in the Dow of just 3.3%. In contrast, while the ‘tech-heavy’ NASDAQ fell by 6.5% in the four weeks to 28 January, those NASDAQ companies included in the R-100 outperformed the index, albeit with a 5.5% decline.

After its strong showing in the last two months of 2004, which saw a combined 9.5% improvement, it should not be too surprising that some of the growth the R-100 has been clawed back. This is especially the case where ‘traditional’ US telco and technology stocks are concerned; these have helped carry the R-100 over recent months.

More analysis of the latest figures and long-term trends will follow in due course.
Jim Chalmers