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Finextra50 ends week up at 100.79

02 July 2007  |  3755 views  |  0 Financial Graph on screen

The Finextra50 Financial Technology Index rose .78% last week, driven by takeover talk at Fair Isaac, Fininfo and Mphasis. Gains were tempered by falls in Broadridge and Advent Software.

Major gainers
Business intelligence and analytics vendor Actuate was the biggest gainer last week, rising 10.75% to close at $6.79 - a level it hasn't seen since April 2002.
Shares in credit scoring specialist Fair Isaac also spiked at the end of last week, as an investment firm shareholder urged the company to sell itself to a larger listed firm or be taken private. Fair Isaac shares ended the week up 8.1% to $40.12. Thomas Sandell, CEO of Sandell Asset Management, sent the letter on Friday to Fair Isaac CEO Mark Greene, urging the board to find a buyer and be more aggressive in its existing stock repurchase programme. Greene joined the company in February.
Sandell, which owns five per cent of Fair Isaac, says there is a clear disconnect between the value that the company's assets should be able to command in the marketplace and the current value implied by the share price.
The company faces new competition from within its client base against its flagship product, FICO scoring. Three of its credit bureau customers have formed a consortium to create a new credit-scoring product called Vantage Score.UK outsourcing and software solutions provider The Innovation Group also posted big gains last week after it reported a contract with Royal & SunAlliance, worth more than £25m over five years. Its shares ended the week up 7.58% to 36.25p.
French data vendor Fininfo rose strongly last week to close at EUR15.10, up 6.62% on the previous week, as rumours continued of a potential takeover by Swiss data vendor Telekurs. An analyst told Thomson news that Fininfo's main shareholder Gerard Jeulin, who has a controlling stake of 52.8% in the company, has been trying to sell his stake for a number of years.
Earlier in June, Paris based Fininfo acquired the 49% stake of former Euronext Brussels subsidiary NextInfo which it did not already hold.
Shares in Indian outsourcing specialist Mphasis, which is majority-owned by EDS, rose 5.56% last week to close at Rs328.50. EDS announced plans to merge its EDS-India operations into Mphasis. The process is expected to complete by the end of this calendar year but would be effective from 1 April 2006 as per the merger proposal approved by the boards of both the companies. The proposal is subject to approval of the stock exchanges, shareholders of both companies and the high courts at Mumbai and Karnataka. Through this merger, EDS's stake in MphasiS will increase to approximately 61.8% from about 51.4% at present.
Citibank initiated coverage of the stock last week, with a buy recommendation and a target price of Rs400. It said that it might make sense for EDS to de-list Mphasis in the medium to long run. But the company could retain the listing to: use Mphasis stock options as incentives; give better accountability and transparency as an audited listed entity, and retain offshore as profit centre (vs. cost centre).
Major losers
Most stocks last week held fairly steady, but there were a few companies that lost value. Broadridge ended last week down 4.08% to $19.12, despite announcing plans to invest $6 million to set up a new facility in the southern city of Hyderabad and raise its headcount by 30%. Broadridge now employs more than 500 people at its wholly owned Indian unit.
The only other index constituents to fall more than two per cent last week were investment management software vendor Advent Software, which fell 3.87% to £32.55, and EDB Business Partner, which fell 3.24% to NKr54 after seeing a big rise the previous week.

Index comparison



Index update
Investors Financial Services is leaving the index following the closing of State Street's $4.16bn acquisition of the business today. The company will be replaced by US e-payments technology vendor Fundtech on the Finextra50.

Methodology

For more information on the Finextra50 Financial Technology Index methodology and constituent stocks, click here.

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