High-tech fever hits the UK
Published: 14 Dec 1999 11:07 GMT
techMARK -- the UK high tech exchange set up to rival America's Nasdaq -- is riding high as Internet fever finds a firm foothold in the UK.
After a period of tech-scepticism here, experts now predict technology will become one of the biggest sectors of the UK stock market and the figures bear this out. In Europe technology shares have risen by 143 percent and Internet volume has trebled in the last quarter and is expected to treble again in the next. Most recently Bank of England governor Eddie George gave a thumbs-up signal to high-tech shares on Monday, saying they appear to be more supportive of equity markets as a whole than previously thought.
The reason is not hard to find: Internet fever began in the US and is finally gathering pace in the UK. techMARK has been the beneficiary of this, according to Miles Saltiel, analyst with West LB Panmure, but it is not the only factor for its success. This year active private investors have risen from 25,000 to 400,000 as the man on the street begins to dabble in stocks.
Saltiel believes the lead for investing in technology comes from such high profile stocks as Freeserve. The free ISP that revolutionised the Internet market is currently capitalised at £4.4bn, making it more valuable than British Airways. It is not only Internet companies that are doing well though. Saltiel points out that silicon chip designer ARM and electronics firm Marconi have both had an excellent year.
While experts agree that the UK is currently reflecting the success of the Nasdaq, it is too early to say whether techMARK is a viable rival to its US cousin. Equity strategist at Merill Lynch Philip Wolsten-Croft predicts the current bullish attitude to technology stock cannot last. "People are pouring money into Internet companies because their value is going up rather than because they are fantastic companies. I'd be cautious on this, they are over-paying for growth."
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