AltX`s IT stocks lag

By Iain Scott, ITWeb group consulting editor

Johannesburg, 27 Oct 2005

Investing in every AltX-listed stock from its listing would have increased your portfolio by about 70% by yesterday. But you would have done better had you avoided most of the IT shares.

Of the 15 companies listed on AltX, the JSE`s alternative exchange, four operate in the IT sector: Xantium Technology Holdings (listed on 20 August 2004), DataPro Group (18 October 2004), Alliance Data Corporation (30 March 2005) and ISA Holdings (27 June 2005).

AltX celebrates its second birthday today with a market capitalisation of more than R2 billion and the announcement that had anyone invested in every AltX-listed stock on the day it listed, his portfolio would have increased by about 70%.

However, the IT stocks have not performed as well as the rest of the shares listed on AltX.

DataPro closed at 60c yesterday - 10% up on its 55c listing price. But the other three IT stocks have all lost market capitalisation since listing.

Xantium, which listed at 50c, was worth 44c yesterday, while Alliance Data Corporation, at 91c yesterday, was 9c down on its 100c listing price.

ISA Holdings was the worst performer among the IT stocks. Formerly Y3K Group, it transferred to AltX after closing at 47c on the main board. Its closing price yesterday was 30c.

Other stocks have fared considerably better, with ice cream and milk company Milkworx, for example, rising from 8c to 22c. Enaleni Pharmaceuticals, which closed at 330c yesterday, listed at 100c.

Noah Greenhill, responsible for business development at the JSE, says the pipeline of companies with the potential to list on AltX is strong, and the JSE is seeing an increase in the quality and profile of companies considering listing.

"Interestingly, even companies that could qualify for the main board are often choosing the AltX route," he adds.

Says Enaleni CEO Trevor Edwards: "The AltX listing has been amazing for our company. We listed on AltX to raise awareness, to increase our empowerment credentials and to raise capital to expand our business.

"As a result we have completed a number of transactions including the second largest pharmaceutical transaction in SA and we are going to be moving to the main board shortly."

Other AltX success stories include Wescoal, African Dawn Capital and All Joy.