Financial technology stocks rally, led by Morningstar and Vasco

Financial technology stocks rally, led by Morningstar and Vasco

The Finextra50 Financial Technology index closed last week at 103.52, increasing just slightly after posting a 4.71% rise the previous week. Morningstar and Vasco Data Security were the biggest gainers, rising 20% and 19% respectively over the past two weeks.

Fininfo has been removed from the index after the acquisition by Telekurs Group was completed on 2 October. Swiss bank-owned Telekurs claims the merger will create the third-largest financial information provider in Europe, with over 1300 employees and well over EUR200 million in annual turnover.

Telekurs itself will now be part of a new umbrella holding company with Virt-x, Swiss exchange operator SWX Group and the SIS Group. The new organisation, called Swiss Financial Market Services Ltd, was authorised by the Swiss competition commission on October 10.

Fininfo's replacement in the index is Australia's Iress Market Technology. Iress provides information, trading, compliance, order management, portfolio and financial planning systems and related tools to investors and wealth management professionals in Australia, New Zealand and Canada. At current trading levels, its market capitalisation is around US$540 million. Over the past two weeks its share price has risen 11.14% to finish Friday at A$8.68.

Major gainers
Over the past two weeks Morningstar made the biggest gain of all index constituents, climbing 20.02% to finish last week at $73.69.

Vasco Data Security has climbed another 19% since September 28, reaching a new all-time high of $43.21 before closing Friday at $42.02 despite several recent analyst downgrades. With online security a hot topic and the company having a history of strong earnings growth - 75% year on year growth reported last quarter - speculation that its business may be hit by falling IT budgets at financial institutions isn't dampening investor enthusiasm. The company releases its next quarterly earnings on October 25, and this will determine whether it can maintain its momentum.

Insurance outsourcing services and software company The Innovation Group rose 13.33% to 34p after revising upwards its expectations for the year to end-September 2008, due to an encouraging pipeline of prospects and higher-than-expected levels of future recurring revenue.

Other companies to post significant gains include:

  • Actuate - 13.80% to $7.34
  • FJH AG - 12.26% EUR2.93
  • Chordiant Software - 11.33% $15.43
  • Hypercom - 11.28% to $5.03
  • Wincor Nixdorf - 11.05% to EUR64.41

Major losers
Only three index constituents have fallen more than 4% over the past two weeks, and with investors maintaining their optimism in the US market, its no surprise the falling stocks are listed elsewhere.

UK derivatives system vendor Patsystems fell 9.09% to 25.00p; India's Nucleus Software was down 7.28% to Rs293.05 and i-flex was down 4.22% to Rs1815.

Index comparison

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

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