IT investors should not be concerned about international stock market volatility, as local IT companies are largely insulated from their effects, say analysts.
The reassurance follows a 4% drop in the JSE's all share index during Friday's trade as international markets responded negatively to concerns over the US sub prime markets.
Specialist investor analyst Brian Rainier explains: "The only concern this type of movement should have for locally-listed IT companies is whether it will impact on the buying plans of their customers. The local IT sector is influenced more by the South African economy than it is by international market movements."
Another analyst, who asked not to be named, noted the technology sector fared comparatively well in Friday's "bloodbath".
"The IT and telecoms sectors are actually holding up well in what has been a turbulent market over the last month. The resources index, for example, has lost a lot of ground, but over the last month the tech index is up 2.7% and the telecoms index is up 2%," he explains.
Dimension Data and Datatec are most likely to see a negative impact on their operations, due to their exposure to international markets, concur the analysts.
Meanwhile, T-Sec economist Mike Schussler says the short-term loss is unlikely to have a medium- to long-term impact on the local market.
"In the short-term markets move together, but there is far less risk in the medium- to long-term. World markets will recover from these moves, with the Far East recovering quicker. If anything, the falls provide better buying opportunities for investors," he says.
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