Heading for the JSE

IBM seems to have shot itself in the foot over its empowerment initiative.

The sell-off to CMGI by Compaq of its Alta Vista unit, originally inherited from Digital Equipment, and the world`s number one search engine, and the surprise acquisition of Control Data by British Telecom`s Syntegra unit dominated the international IT world last week. Locally, the continued news emanating from new and potentially new IT listings stole the media spotlight.

• we saw the disappointing listing of Y2KTec but the satisfactory listing of Contlan Holdings;

• excellent Q3 numbers from Mustek;

• mediocre Q1 figures from Synergy Holdings (much work needs to be done if the prospectus full year results are to be attained);

• full year loss from Hicor, which now intends to become focused on IT and hopefully move to the IT sector of the JSE;

• "satisfactory" full-year figures from Telkom;

• the postponement of the listing of Ukukhanya Technologies; and

• the publication of the prospectus for Bynx, which intends to list in the IT sector of the JSE on 15 July.

[Local]

Local Cautionary Notices (see attachment)

Local Listing calendar (see attachment)

Other local news included:

• the announcement that Pastel Software has entered into a joint venture with US investors to establish Pastel USA; and

• that a strategic alliance has been created between Metropolis and VerticalNet of the US.

Additionally, IBM seems to have shot itself in the foot over its empowerment initiative and the legal wrangle over Unihold`s ex-employees continues to make headline news.

• the announcement of the resignation of Jeff Waxman, chairman and CEO of Secure Computing;

• the appointment of a new CEO at PRT Group, as well as a reduction of about 17% in the workforce; and

• the announcement of a new management team for Compaq`s European operations, although no overall number one is yet in sight.

Additionally, it looks as if IBM will acquire Sequent Computer Systems to complement its high-end commercial server business. Sequent is the last of the historical independent "real-time" computer vendors with Tandem, Stratus, Concurrent and a few others having been swallowed up over the past few years. This potential demise of Sequent was one of my predictions for this year; and if the IBM take-over does happen, the local outlet in the form of Comparex/PQ Africa is unlikely to hold on to this capability for very long.

[International]

Other international news included:

• the signing of an agreement by which Lucent Technologies now assumes full control of its joint venture with Cirrus Logic;

• rumours that Computer Associates is to acquire Israeli-based Carmel Software Engineering for about $25 million, and

• Geotronics, which has just acquired Wang Global, is looking to purchase Olivetti`s research arm Olivetti Ricerca.

Losses came from Barrister Information Systems, DCI Telecomms, e-Net, Micro-Integration, ObjectShare and US Wireless.

Good numbers were recorded by Catalyst Semiconductor (back in the black), Daktronics, FI Group, Great Plains Software (back in the black) and Perle Systems. CellStar reported satisfactory numbers.

Mediocre returns came from GT Interactive (but back in the black), Skillsgroup and Unicomp (back in the black - just); while very poor results came from CSP (just in the black) and Total Systems.

Other financial news included profit warnings from Applied Microsystems, Barra (restructuring charge), CNET (loss expected), Evans & Sutherland (loss expected), Intelligroup, Keane, Komag, Omtool (loss expected), PCD, PRT Group (restructuring costs), Rogue Wave Software, S3 (loss expected), Seagate, Secure Computing (loss expected) and Template Software (loss expected).

Locally

Casey (+25%)
Cyberhost (23.5%)
Dectronic (+31.3%)
Micrologix (+20.8%)
MMW (28.95%)
Secure Data (-22.3%)
Selective Financial Group (Pinnacle) (-31.4%)
Skills Accel
Spicer (22.9%)
Whetstone (-29.8%)

Internationally

Applix (+35.6%)
Arm Holdings (+26.2%)
Compucom Systems (+38.7%)
Digital River (+31.6%)
Exodus Comms (+31%)
Forte (+38%)
Hyperion Solutions (+41.9%)
Inktomi (+27.8%)
ISS Group (+30.7%)
PCD (-31.2%)
Pervasive Software (+26.6%)
Security First Technologies (+27.5%)

Microsoft is again in the news. This time it is in respect of its accounting practices, particularly regarding the way it recorded revenue during its long boom times.

Additionally, the next two to three weeks are likely to reveal some interesting financial numbers as Q2/half-year results are declared, especially following the spate of warnings that have recently been issued.