Finextra50 hits all-time low, led by UK fintech firms

Finextra50 hits all-time low, led by UK fintech firms

The Finextra50 Financial Technology Index finished last week down 3.39% to 92.49 as fears continued that the latest round of losses at major financial institutions will have a knock-on effect on technology budgets. Misys, Fidessa, Gresham and Microgen all saw double-digit falls while the index's only strong performers this week were India's Nucleus Software and Online Resources in the US.

Major gainers
Banking and lending software vendor Nucleus Software saw a rapid rise in share value last week amid heavy trading volume. It closed Friday up 21.2% on the previous week to Rs327.00.

Online Resources closed last week up 6.65% to $9.62, continuing to gain back some of the ground it lost after revising its full year financial guidance downwards at the end of last month. This led to a one-day fall of more than 30% on October 26, but since then the online banking software vendor has seen its share price gradually improve, with confidence improved by chairman and CEO Matthew P. Lawlor comitting to buy more shares and stating in an open letter that he still projects revenues, pre-tax income, and core earnings per share all to grow 20% or more next year.

3i Infotech was the only other company in the index to see significant gains last week, finishing up 4.27% to Rs 130.50 after unveiling its expansion plans in Chennai. The company announced the launch of its first International Data Centre (IDC), which will offer managed hosting services for application and disaster recovery solutions.

Major losers
The UK market saw the biggest fallers in fintech in a week that saw most index constituents move downwards. Misys was the biggest loser, closing down 13.17% to 194.50p. Analysts at UBS downgraded the company to "sell" earlier in the month, while others dropped their target prices, amid concerns that banks are reviewing IT budget levels and could reduce them, impacting firms like Misys.

Other firms to see double-digit falls last week were Microgen (down 13.04% to 40.00p); Gresham (down 12.57% to 81.75p); Fidessa (down 11.28% to 885.00p); and Bravura (down 11% to AUD$1.78)

Most of the significant losses were seen by firms in Europe. But the biggest faller in the US market was buy-side outsourcing specialist SEI Investments, which closed Friday down 7.87% to $28.58 after a Garp Research & Securities analyst downgraded the company to "neutral" from "buy" amid fears that a sustained stock market downturn could hurt its profits.

Index comparison

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

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