Aussie tech sector not immune to market downturn
It is “highly unusual” to see a market sector crash twice in two years as the technology sector falls back to pre-COVID levels, according to Dale Gillham.
While the Australian stockmarket had fewer technology stocks than its US counterpart, that did not mean it had been immune to the downturn. It was almost 11 years since a fall as large as this had occurred in the sector, Gillham said.
The sector was one of the smallest in the Australian Securities Exchange (ASX) as 87% of companies had a market cap of less than $100 million and the top five companies had a combined market cap of $60 billion.
He said: “By mid-May, the Australian tech sector had effectively fallen back to pre-COVID levels and taken with it the hopes of many investors who had jumped into technology stocks following the COVID crash.
“It is highly unusual to see any sector crash twice in the space of two years, yet the Information Technology sector fell 49% from a high in February 2020 into the COVID low of March 2020.
“It then rose nearly 200% over the following year into February 2021, as new investors and traders flooded the market attempting to cash in on the rise.
“It then fell away for a short period of time and after making a new all-time high in August 2021, it fell 44% into May 2022.”
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.