Technology stocks have given investors a total return of 33.9% for the year to date\u201a compared with 5% for the FTSE-JSE all-share index\u201a says Andrew Newell\u201a head of business development at Cannon Asset Managers.<\/p>\n
The asset management company has\u201a however\u201a warned that not all information technology (IT) companies within the JSE were good investments\u201a as some traded on more demanding multiples than others.<\/p>\n
\u201cThe FTSE-JSE technology index has returned almost 54% per annum on average over the past three years\u201a against the FTSE-JSE all-share index (ALSI) return of 21% per annum\u201a over the same time period\u201a\u201d Newell said.<\/p>\n
Looking ahead\u201a he said\u201a despite the sector\u2019s strong performance it remained attractively priced.<\/p>\n
\u201cHowever\u201a investors ought to exercise caution\u201a as there are a number of companies within the IT sector which appear to be fully priced. Naspers is a case in point\u201a\u201d he said.<\/p>\n
\u201cDespite being commonly recognised as a broadcasting or media stock\u201a the majority of the company\u2019s market capitalisation is explained by Chinese-based TenCent\u201a an internet and gaming firm that is being priced euphorically.\u201d<\/p>\n
Elements of the IT sector would continue to deliver results over the medium and long term\u201a Cannon Asset Managers forecast\u201a amid an environment of growth being increasingly driven by a greater use of information technology and systems.<\/p>\n
Related links<\/strong><\/p>\n KT Corp block horrendously, stupendously, horrifically bad<\/strong><\/a><\/p>\n