T-Net 20 High Tech Stock Index Update by Michael Volker
index has been on quite a roller-coaster ride in the past few months. Until
early March, it appeared that share prices knew no bounds. By almost any
standard, market valuations had risen to euphoric levels. But by mid-April, one
could have readily concluded that the proverbial "bubble" had indeed
burst, or at least lost some air. In February the T-Net20 index, which was
started at 1,000 in January, 1998 briefly touched the 10,000 mark signifying a
10-fold return. But, by the end of March, the index retreated to close at 7785
and by April 14th, it fell even further to 5280.
can be attributed to the overall "correction" in the global technology
sector as investors realized that they had bid prices up a little too quickly in
the heat of their enthusiasm for the sector.
value of the top 20 more than doubled in the first quarter reaching $62 Bn by
June. However, in April investors were feeling pretty glum as they watched their
paper profits of the past quarter evaporate. Fear not: the fundamentals haven't
changed. B.C. Technology firms are reporting sales and earnings performance in
line with expectations and a bit of a breather may not be a bad thing. In fact,
it may represent a buying opportunity. Pessimists will tell you that stocks have
declined by more than half from the 52-week highs. Optimists will tell you that
stocks are up more than double from their 52-week lows.
The index is updated on a quarterly basis. It includes the top 20 B.C. based companies based on their market capitalizations at the end of each quarter. In April, three companies were dropped from the list, being replaced by three others with larger market caps. The dropped ones are: Forbes Medi-Tech, Sierra Systems Group, and Inex Pharmaceuticals. These were replaced by: Aim Global Technologies, Inflazyme Pharmaceuticals and Stressgen Biotechnologies. Numbers in brackets represent market caps at March 31st.