JSE IT shares today tracked international concerns about the possibility of a US interest rate hike, while local market watchers closely followed news about the Google listing.
By 11.30am, the JSE all share index had fallen 148 points to 10 259, a drop of 1.43%. The overall IT index was down 149 points at 7 054, a loss of 2%; the software index had shed four points, or 2.88% to 147 points; but the hardware index had edged up four points, or 1.4%, to 405.35.
One JSE analyst says there is concern that the US may increase its interest rates sooner rather than later following a string of economic data releases showing that the American economy may be "overheating".
"The impact will be on the valuations of companies, such as the cost of borrowing money for capital expenditure, although we don`t see it affecting the sales of IT products and services," he says.
News on local listed IT shares has gone quiet over the past couple of weeks. The last two big announcements were the black economic empowerment deal set up by Dimension Data and the Reunert offer to minorities for CS Holdings shares.
Dimension Data was last seen at 420c, a loss of 15c, or 3.6%, and Datatec had shed 30c, or 2.3%, to R12.50.
CS Holdings was 1c higher at 34c, and Reunert had advanced 14c to R24.
Little known warrant
Latest news of the Google IPO was that Time Warner has a previously disclosed, but little known, warrant to purchase stock in the US search engine company.
According to www.thestreet.com, Time Warner`s stake in Google, which could be 3% of Google`s outstanding shares, could be worth at least $500 million (R3.25 billion) to the publishing company.
Time Warner has not been known for its success in its Internet ventures and recently dropped the AOL part of its name.
In Time Warner`s submission filed with the Securities and Exchange Commission last week, the company says it had exercised a warrant to purchase 7.4 million shares of Google`s Series D preferred stock for approximately $22 million, implying a price of nearly $3 per share.
Each preferred share, says Time Warner, is convertible into one share of Google common stock at any time chosen by AOL, and converts automatically if Google completes an IPO with a certain minimum offering price and proceeds. Time Warner didn`t disclose those details.
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