Finextra50 flat despite gains in Indian fintech stocks

Finextra50 flat despite gains in Indian fintech stocks

The Finextra50 Financial Technology Index finished the week down .01% to 95.35, as the recently volatile US and European markets remained fairly steady. I-flex, 3i Infotech and Mphasis in India all posted significant gains, while only Linedata, Nucleus Software and Fiserv dropped by more than 3%.

Major gainers
i-Flex was the index's biggest mover last week, rising 8.72% to finish at Rs2033. This week of positive movement reverses a gradual decline the stock has seen since i-Flex reported quarterly earnings on July 31.

i-Flex's share movements continue to be overshadowed by the prospect of Oracle completing its takeover of the company and delisting it. Oracle currently owns around 83% of the company, most recently offering Rs 2,100 per share at the end of last year, and acquiring 23 million shares tendered in the offer for approximately USD$1.1 billion.

To de-list the company, Oracle would need to hold at least 90%. In Oracle's last public statement on the matter, the firm said it would not make another open offer for at least five years if the price stays above Rs2,100.

Oracle's major hurdle to total acquisition and de-listing is the Securities and Exchange Board of India's (Sebi's) takeover code, which protects minority shareholders. Under the code they can't be forced to surrender their shares to the acquirer, and any buy-back price is dictated by a reverse book building process, which requires generating offers from sellers.

The record date for 3i Infotech's 1:1 bonus share issue was last Tuesday, and taking this into account, the stock finished strongly last week, up 7.64% to Rs148. This was helped by news that the company has acquired a 51% stake in BPO services provider HCCA Business Services Private Limited (HCCA). 3i infotech says that the investment in HCCA was based on its delivery capabilities in HR operations, including large scale payroll processing for clients in the financial services sector. Clients of HCCA include several leading domestic and multinational banks, insurance companies, investment banks and brokerage houses.

Also in India, Mphasis rose by 5.81% to finish at Rs293.10. Outside India, the only other significant gainers for the week were Temenos, which closed up 5.93% to CHf28.60, and Factset Research Systems, which rose sharply on Thursday after paying a 12c dividend, and finished the week strongly, up 5.1% to $59.93.

Major losers
Only three companies in the index fell by more than three percent last week, with Linedata Services experiencing the biggest drop. It closed the week down 6.25% to EUR15.00.

Nucleus Software bucked the upward trend for Indian fintech firms, falling 4.63% to Rs347.05. Meanwhile, in the US Fiserv fell 3.86% to finish Friday at $46.52

Index comparison

More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.

Comments: (0)