The Finextra50 Financial Technology Index finished last week up 1.32% to 95.36, led by recoveries from Broadridge and Orc, and news of a major shareholder upping its stake in Advent. EFunds leaves the index as its acquisition by Fidelity was completed, and it is replaced in the Finextra50 by US-based business process management specialist Pegasystems.
Fidelity National Information Services completed its acquisition of eFunds on 12 September, paying approximately $1.8 billion in cash, or $36.50 per share, for all of the outstanding shares of eFunds common stock.
Fidelity ended the week up 3.05% to $46.29.
With eFunds therefore removed from the Finextra50, Nasdaq-listed business rules and process management software specialist Pegasystems joins the index. The company, which gains the majority of its revenue from sales to the financial services sector, has turned its business around to report consecutive quarterly net profits in 2007, after reporting net losses in 2006. Its last quarterly results in August showed revenue of $35.7 million, up 30% from the second quarter of 2006, and net income of $0.6 million.
Broadridge Financial Solutions posted the index's biggest gains last week, bouncing back from the previous week's fall of 8.03% to finish up 11.61% to $18.65.
During the week the company's executive chairman Arthur F. Weinbach bought 50,000 shares of stock, according to a Securities and Exchange Commission filing Thursday.
In other news, during a busy week for the company, Japanese Investment Bank Mizuho Securities announced it is extending its use of Broadridge's Gloss product for non-resident trade clearing and has added a related module, the JASDEC Adapter, for investment trusts book entry settlement. The company also announced an extension of its agreement with NewRiver to use that company's database of disclosure documents as part of Broadridge's electronic delivery of regulatory documents to investors.
Orc Software, like Broadridge, bounced back last week after falling the previous week. It posted a 8.66% increase to end Friday at SKr160. On Tuesday it announced it had added Chicago-based trading firm Audentes Technology as a client for its Liquidator derivatives algorithmic trading software.
Advent Software also finished the week strongly, up 8.55% to $44.16, on news that value investor SPO Advisory had spent $50.9 million between 30 July and 6 September, to purchase more than 1.28 million shares of Advent in the open market and bring its total stake in the company to 30%. It now controls roughly 7.69 million Advent shares. As this reflects a 5% change in the freely traded shares of the company, a divisor adjustment will be made to the Finextra50 index before next week to reflect the free-float market capitalisation of the company.
Advent also announced last week it had added Trusco Capital Management as a new customer for its Advent Portfolio Exchange.
Other companies to see significant share price improvement last week were Factset Research Systems, up 6.34% to $60.38, and Germany's FJH, which ended up 7.42% to EUR 2.75.
Last week's fallers were dominated by the volatile Indian fintech sector, but UK asset management firm Statpro posted the biggest fall, ending the week down 9.18% to 89p.
3i Infotech, Mphasis and Nucleus Software all ended down last week, finishing Friday down 7.28%, 6.07% and 6.06% respectively. The firming rupee, which climbed to its highest level in a month on Tuesday, weighed on export-driven stocks such as software services. This was compounded by fears of a possible US slowdown.
Despite market pessimism, some Indian firms are reporting success in growing their business outside the US and are optimistic about earnings growth. Mphasis managing director Deepak Patel told Reuters last week he expects net profit to jump by more than 60% in the current fiscal year to end-March thanks to new business from EDS, which merged its Indian arm into Mphasis earlier this year.
But Indian fintech stocks in general are likely to remain volatile due to exposure to the US market and currency.
Other firms to fall last week include Wincor Nixdorf (down 6.33% to EUR60.53) and GL Trade (down 5.51% to EUR36.9).
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.