Consolidation turmoil

Although it was quiet on the international and local IT front last week, there was continued turmoil across the international telecommunications sector with more and more consolidations taking place.

Locally, we see many IT companies languishing with very low share prices, often lower than their original listing levels.

Upside down

Locally, we see many IT companies languishing with very low share prices, often lower than their original listing levels, creating some potentially interesting and cheap acquisition targets not only in the development capital and venture capital sectors, but also on the main board. Companies in this latter category include Brainware, Connection Group, Elexir, Infiniti, Multimedia Warehouse and Seartec.

• the satisfactory listing of Stella Vista Technologies on the development capital sector of the JSE;
• the announcement that Contian Holdings, an IT company specialising in forming IT strategies for companies, will list in the venture capital sector of the JSE on 30 June; and
• good maiden results from Accord Technologies (both income and revenue well above projections).

[Local]

Local Cautionary Notices (see attachment)

Local Listing calendar (see attachment)

Other local news included:

• the news that EDS Africa is likely to lay-off some 200 staff following a disappointing set of numbers; and
• the announcement by Y3K that one of its subsidiary companies has opened an office in Morocco as a base for further expansion into North Africa.

• we saw the unexpected acceptance of Cable & Wireless` bid for a stake in Japan`s International Digital Communications, despite a counter offer from Nippon Telegraph & Telephone, making it the first foreign company to acquire a major stake in a Japanese telecommunications company;
• the appointment of a CEO at Eastman Kodak;
• news of more senior resignations at Cabletron, adding fuel to the take-over rumours; and
• the re-structuring of Symantec which included the spinning-off of its Web tools unit.

[International]

Other international news included:

Rumours abound that BellSouth is considering the acquisition of Qwest Comms, following its 10% investment stake a few weeks ago. There was also talk that the Walt Disney Company is trying to find a way to acquire the 57% of Infoseek it doesn`t already own, despite an agreement that it could not do so before the year 2001. The rumour mill also suggests that Baan NV could be the subject of an acquisition, with names like PeopleSoft being potential contenders.

We saw losses from Accelr8 Technology, CMGI, Dunn Computer, Emultek, Microlog, Mortice Kern Systems and National Semiconductor,

Good numbers were recorded by AIT Group, Comino, GEC, Gresham Computing, Group 1 Software, Groupe Atos, Printrak International (back in the black), Tech Data, Vicom (back in the black) and Vodafone Group. Satisfactory results were recorded by Micros-To-Mainframes, Radstone Technology, Touchstone Group (back in the black) and Wallace Computer Services.

Mediocre returns came from American Software.

Other financial news included profit warnings from Compaq (possible Q2 loss) and Lockheed Martin; share splits from TriQuint Semiconductor and Veritas Software; and an IPO registration from Red Hat, the first Linux-related company to do so.

Locally

Aries (+26.9%)
CIH (-23.3%)
Elexir (+24%)
Explorer (-25.5%)
HIX (-20.9%)
JemTech (+29.4%)
Log-Tek (-20%)
SecureData (+29%)
Selective Financial Group (Pinnacle) (-30.4%)
Siltek (+22%)

Internationally

ASM International NV (+24.7%)
C-Cube (+20.6%)
Encad (+23%)
Forte (+27.9%)
Geoworks (+33.3%)
Harbinger (+20%)
Infoseek (+21.3%)
Iridium (-28.4%)
ISS Group (+23.5%)
MEMC Electronic Materials (+24.3%)
MIPS (+21.9%)
Network Solutions (+22.6%)
Progress Software (-23.7%)
TriQuint Semiconductor (+34.5%)

The Microsoft trial has resumed with indications that it is not going well for Microsoft. All the previous speculation as to how the organisation might be broken up or re-structured have surfaced again, particularly since it was generally abnormally quiet in the IT market last week.