Technology stocks are trading higher on the second trading day in the new year than they were a year ago.
Companies in the technology index, which includes Business Connexion, Dimension Data and EOH, opened the day at 14 903, and lost marginal ground to close at 14 688.
However, a year ago, the same index opened substantially lower, at 9 513, and closed on the same day at 9 902.
Software and computer services, a subset of the technology index that houses UCS, Faritec and GijimaAst, among others, also performed better so far this year.
A year ago, the index opened at 201, and closed at 210. Yesterday, however, it opened at 316 and remained unchanged to close at the same value.
Chris Gilmour, an analyst with Absa Investments, says IT is expected to continue this upward trend. “It's a good sector to be in, both locally and globally, because of its ability to help enterprises push costs down.”
He adds that the real economy has a demand for IT, which has influenced stocks recently. He expects this demand to continue to grow faster than the economy.
Dial tone
Last night, the sector closed at 54 128, after opening the day at 55 386. A year ago, the index opened lower at 51 266, but gained well during the day to close at 54 388, slightly better than yesterday's close.
Mobile telecommunications, a subset of the telecommunications index, has also not fared better so far. A year ago, the index opened at 169 and closed at 180. Yesterday, it opened at 185 and lost some ground to close at 180.
Gilmour attributes this to the fact that there is a lack of competition in SA, with the sector being dominated by a handful of major companies. He expects the stocks to remain stagnant during the year unless companies start innovating on price.
Overall, the JSE has traded better this year than a year ago, with yesterday reportedly reaching a four-month high. The all share opened at 28 095 and closed at 27 999. A year ago, it opened at 21 765 and closed at 22 304.
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