ORGANIC EXPANSION
Share price runs of technology companies to hit skids in 2017
Tech firms to dip as rising global government bond yields put downward pressure on price:earnings ratios, says analyst
While the share prices of some listed technology firms have risen sharply in 2016, outperforming the JSE all share index, one analyst has warned their overall performance is likely to slow down in 2017. This prediction is due to rising global government bond yields that put downward pressure on price:earnings ratios, says Mergence Investments’ Peter Takaendesa. The technology index has shrunk materially over the past few years following the delisting of companies such as Business Connexion and Gijima. Datatec and EOH are the biggest groups in the JSE’s IT sector, and their performances have a significant effect on the movement of the index. The star performer in 2016 in the listed technology index is Pinnacle, which has gained 44% since January. The all share has gained less than 0.5% in 2016. The group has recovered from the disruptions caused by corruption allegations against one of the executives two years ago and a recent mention in a corruption case against a senior official of...
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