As Finextra conducted its six-monthly review and refresh of index constituents, three new companies joined the Finextra50 Financial Technology Index, which closed down 5.1% last week to 51.01. Thomson Reuters led the few gainers, while Yucheng and Linedata led the many losers.
Only eight companies saw their shares rise last week, led by Thomson Reuters, which was up 6.92% to 1,220p in London. In its Q3 results statement, the company reported revenues of $3.3 billion for the quarter, an increase of 8% compared to 2007 pro forma third quarter revenues. It also reported that integration savings are running ahead of plan and confirmed its financial guidance for 2008.
ACI Worldwide also did well last week on the back of Q3 results that saw it return to profit. Its shares closed Friday up 5.36% to $14.75. Its revenue for the quarter ended 30 September was up 28% to $108.6 million, while net income for the quarter was $1.7 million compared to net loss of $8.6 million during the same period last year.
Other companies to see reasonable gains include:
Yucheng Technologies led the fallers last week, dropping 24.43% to $6.00 by Friday, despite reporting on Monday that it was raising its revenue outlook for fiscal 2008. It also beat analyst estimates with its third-quarter GAAP net income of $3.7 million, up from last year's $2.57 million.
Other companies to see significant falls include:
This week Finextra conducted a review of index constituents against its methodololgy, and also revised some of the criteria for index inclusion. Because of tumbling shareprices we have relaxed our lower limit for free float market capitalisation of index constituents.
Another change relates to the aim of the index when we established it - to focus on companies that derive most of their income from providing IT and related services to financial institutions. Originally the minimum revenue percentage from the sector was set at 50%. But in light of the current climate for spending in this sector we have reduced this to 40%.
Despite this, two companies have been removed from the index this week. Through growth and acquisitions boosting their presence in other verticals such as public sector and energy, Firstsource and EDB Business Partner both fell below 40% in their most recently available figures for revenue from financial sercvices customers. They are replaced by two US-based diversified outsourcing service providers - Syntel and EXLService Holding, which each derive around two-thirds of revenue from the financial services sector.
Also this week, Oberthur Technologies has been removed from the index ahead of its de-listing from Euronext Paris after its buyout by an investment vehicle of the company founders. It is replaced by UK e-trading vendor Ffastfill.
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.