Equity still a burning issue

Microsoft`s abortive bid for SAP and its filing of an appeal against the recent ruling by the European Commission dominated the international world of IT and telecommunications last week.

At home, the US 'multinationals agreement in principle` to and the setting up of a committee to identify the associated issues and challenges re the equity shareholding requirements contained within the ICT black empowerment charter, and the results from MTN, Telkom and Vodacom stole most of the local ICT headline space.

* We saw very good year-end figures from MTN (revenue and profit both well up;
* Good year-end numbers from Telkom SA (revenue up but profit up over 175%) and Vodacom (both revenue and profits well up); and
* The suspension of Cycad`s shares.

Other local news included:

* Venfin`s offer for the minority shareholdings in Intervid, which if successful, would lead to the de-listing of the latter; and
* The appointment of Jackie Manche as CEO of ICASA.

A prominent Wall Street analyst, Steve Milunovich, is suggesting that HP should split its operations to compete more effectively.

Paul Booth, MD, Global Research Partner

Furthermore, on the local front look out for further developments by both MTN and Vodacom in the race to 3G.

On the African scene we saw the re-branding of Vee Networks (Nigeria) as Vmobile; and the re-opening of Vodacom`s Zambian cellular opportunity.

* Microsoft filed an appeal against the European Commission`s judgement earlier this year;
* The announcement that Microsoft had tried to buy SAP last year;
* iGate sold off its staffing operations in Australia and Scotland; and
* A delay in Hutchison Whampoa`s listing of its telecoms businesses in Hong Kong.

International strategic partnerships were announced between AXS-One and RedFile, a digital risk and information management solutions provider; and between Diebold and Lenel Systems International re the latter`s Security Knowledge Management Solution.

Additionally, look out for IBM`s acquisition of several IT services companies in Germany; and the buyer for SBC`s stake in Denmark`s TDC.

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news included:

* The appointments of Janice Anderson as chairman and CEO of Onyx Software, Bill Lyons as chairman of AXS-One, Ali Kutay as president and COO of GoldenGate Software, Ron McIntyre as president of Vocalscape, Richard Roedel as CEO of Take-Two Interactive Software, Izhar Shay as chairman and CEO of V-Secure, and Eric Tveter as COO of Telewest Comms;
* The resignation of Mohamed Khashoggi one of the original directors of Spantel Comms; and
* The death of Bernie Vonderschmitt, co-founder of Xilinx.

We saw very good* numbers from National Semiconductor (back in the black), SteelCloud (back in the black) and UTi Worldwide.

Good figures* were recorded by CDT, Comtech Telecomms, NetStore (back in the black) and Volt Information Sciences (back in the black); and satisfactory* ones by NeoPost.

Mediocre* returns came from Analogic, CMGI, GFI Informatique, Kewill Systems (but back in the black) and SSA Global.

Losses* were posted by Carreker, CPAC, Heidelberg, IDT, InTechnology, Leitch Technology, Net2Phone, Remec, SCO Group, Take-Two Interactive Software, Unify and Versant.

Other financial news included analyst upgrades for BindView, Entravision Comms, FileNet, iBasis, Inet Technologies, Itron and SonicWALL; analyst downgrades for Adobe, Au Optronics, Cree, Kronos, OmniVision Technologies, Tessco Technologies, TiVo and WebEx Comms; a private placement of shares by Top Image Systems; a share offering from Journal Comms; private funding obtained for Celoxica Holdings, Force10 Networks, Kineto Wireless, Nsite Software, TechTarget and Verisim; a share buy-back announcement from Radyne ComStream; a positive results/profit warnings from EMC; a negative results/profit warning (often veiled) from Cymer; planned IPOs from ISP PlusNet Technologies on London`s AIM and Tata Consultancy Services in India; a satisfactory IPO from PowerDsine; and a good IPO from Amino on London`s AIM.

Locally

Business Connexion (+13.8%)
Casey (-66.7%)
CompuClearing (-9.1%)
CS Holdings (-20%)
Elexir (-50%)
Intervid (+10%)
MGX (+66.7%)
Prism (-8.7%)
RA Hold (+12.8%)
Stella Vista (-33.3%)

Internationally

Allegiance Telecomms (-32.6%)
Applied Microsystems (-25%)
Comtech Telecom (+22%)
Daisytek (+20%)
Digital Lightwave (+21.5%)
ECI Telecom (+18.4%)
FiberMark (-34.8%)
Fibernet Group (+17.9%)
i2 Technologies (+30.1%)
IDN Telecom (+17.9%)
Network Technologies (+50.3%)
Riverstone Networks (+26.4%)

In terms of indices, Nasdaq was up 1.1% and the JSE up 0.1% for the week.

A prominent Wall Street analyst, Steve Milunovich, is suggesting that HP should split its operations to compete more effectively against companies such as Dell and IBM. He highlighted the printing and imaging parts of HP as particularly suitable for such a move. Last October he suggested to Sun Microsystems that it should focus on its scalable high-end Solaris systems and drop the Java Desktop System and either spin-out or 'open-source` Java.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth in excess of 50%.
* Very good: Both revenue and net income growth in excess of 25%.
* Good: Both revenue and net income growth in excess of 10%.
* Satisfactory: Revenue is within 10% of previous year and net income is up.
* Mediocre: Either revenue and/or net income is down.
* Very poor: Net income is less than 1% of revenue.
* Loss: A loss has been recorded.