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Election result and acquisitions buoy Indian fintech firms

01 June 2009  |  3885 views  |  0 Election result and acquisitions buoy Indian fintech firms

Financial Technologies India led the gainers on the Finextra50 Financial Technology Index in May, as the re-election of Manhoman Singh boosted the Indian market. 3i Infotech also benefited from this and positive response to a US acquisition. The index finished the month 8.5% higher, despite falls for constituents including ACI and Broadridge.

Gainers

Financial Technologies (India) was the index's biggest gainer in May, rising 111.11% to 1,446.10. The company's revenue comes from license fees for use of its broker terminals and software, and also selling stakes in exchanges and other start-up ventures that it incubates. The company has recently been given a buy rating by Indian brokerage Antique Broking.

3i Infotech also saw big gains in may, rising 74.32% to Rs 74 after announcing at the end of April that it has entered into an agreement to acquire J.P. Morgan Treasury Services' national retail lockbox business (NRLB) in the US. 3i Infotech's subsidiary, Regulus Group, is currently the largest outsourced remittance processing provider in the US, and the company says this acquisition will further strengthen that position.

The company also finished the month with news that it expects its China operations to break even by the end of the current financial year. It is using China for servicing domestic (China-based) as well as international customers, after first venturing into China in August 2008 through the formation of a joint venture company called Elegon Infotech. 3i Infotech has a 51 per cent stake in Elegon while the balance is held by Beijing-based Yucheng Technologies.

Other companies to see significant gains in May include:

Losers

ACI Worldwide led the fallers in May, ending last Friday down 14.01% to $14.91 after earlier in May posting quarterly results below market estimates. The company claims it was hurt by a fall in software license fees and foreign currency fluctuations. It posted a net loss of $4.1 million, or 12 cents a share, compared with a loss of $4.9 million, or 14 cents a share, a year ago.

Other companies to see significant falls include:

 

Index comparison


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

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