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What a difference a month makes. After a bleak performance during June, markets rallied considerably during July, as many large global corporates reported earnings figures at least in line with expectations. The omens were already good by the middle of the month. Then came a 0.75% interest rate rise in the US on Wednesday, exactly as investors had anticipated, followed by weaker-than-expected US economic data on Thursday. The latter led investors to hope that the Federal Reserve may need to slow the pace and extent of further interest rate rises to avoid tipping the US economy into recession.
The tech-focused NASDAQ was up 12.3% month-on-month (MoM), on the back of strong earnings numbers from the largest tech players. It has recovered some of the ground lost earlier in 2022, now down 20.8% year-to-date (YTD).
In the UK, the FTSE Software and Computer Services (SCS) index was up 8.9% MoM and mirrors the NASDAQ YTD at 22.2% down. The FTSE 100 was up 3.5% MoM, now 0.5% up compared to the start of the year.
Winners and Losers
Of the 150 or so stocks that we track for this column, fewer than 30 managed to avoid a loss last month. In contrast, we saw over 100 posting gains during July. The strongest performers included cybersecurity provider Darktrace, public sector and healthcare software specialist Kainos, learning and talent management specialist Learning Technologies Group, offshore players Mindtree and Happiest Minds, fraud prevention software provider GB Group, system software company Cerillion Technologies and genome sequencing technologist Oxford Nanopore.
Many of the Big Tech performed well on the back of strong earnings results, including Amazon, Apple, Microsoft and Alphabet/Google. Netflix also gained to claw back some of the ground lost during 2022 to-date. The weakest performer was Meta/Facebook.
There was a mixed bag of weak performers, including SNAP, Cazoo, THG, Attraqt, BT Group, IBM, Temenos, Made Tech and RM.
More detail on the Winners and Losers is available in Share Performance in July 2022 for HotViews Premium readers.
Outlook
This month's market activity drives home the importance of expectation management.
Firstly there are investors' expectations on inflation and how central banks will respond. July's narrative was around investors having a more confident understanding of Federal Reserve thinking than had been the case in previous months and building that into valuations. Secondly there are investors' expectations around company performance in the current environment, with the markets looking to companies to articulate the art of the possible in the current environment and then show they can deliver.
It is too early to tell whether the worst is over for tech stock markets in general. But this month's results suggest we may be starting to see the rehabilitation of those stocks which deliver what investors are increasingly looking for.
A promise of future growth is no longer enough - investors want to see a diversified suite of products and/or services generating recurring revenues, a predictable cost base in the face of high inflation and ultimately a path to profitability. And with expectation management so crucial, good communication is now more important than ever.
Posted by Tania Wilson at '19:11' - Tagged: markets macro
This year’s UK Public Sector Software and IT Services (SITS) Suppliers, Trends and Forecasts report is now available. It serves as an introduction to the market and will be followed by a series of six reports (one for each of the public sector subsegments we track) providing an overview of the market size, forecast and key suppliers in those areas. Later in the year we will be publishing in-depth analysis of the key trends likely to impact these six subsectors and their SITS suppliers between now and 2025.
Today's report consolidates TechMarketView’s analysis of the UK public sector SITS market in 2021. The market grew strongly as digital transformation momentum that built up during the COVID-19 pandemic endured and tactical spend began to translate into strategic action. We forecast that the public sector SITS market will grow each year throughout the 2022-25 period, albeit not as strongly as it grew in 2021.
The report also contains an update to our UK public sector SITS Top 20 supplier rankings based on the latest available financial information (as at end of June 2022). Top 20 rankings for central government and Top 10 rankings for each of the remaining subsectors (local & regional government, health, education, police and defence) are also provided.
PublicSectorViews’ subscribers can find out the size of the public sector market, its growth forecast, and who the leading suppliers are by downloading the research today. Keep an eye open for reports on central government, local & regional government, health, education, police and defence, which will be available shortly. If you are not yet a subscriber, or are unsure if your company has a subscription, please contact Deb Seth to find out how you can access the research.
Posted by Dale Peters at '07:30' - Tagged: forecasts research ranking market+trends public+sector
There is no shortage of economic data in circulation at the moment, most of it fairly downbeat. A round of UK economic updates last week on employment, vacancies, wages, inflation and consumer confidence was followed on Tuesday by a gloomy assessment from the International Monetary Fund (IMF) that the UK is set for the slowest growth of the G7 richest countries in 2023. The Bank of England Monetary Policy Committee meets next week and will surely raise interest rates once again.
As the economic storm clouds gather, it is becoming increasingly clear that the UK's labour-intensive economic model of the last decade is unsustainable in the new era of workforce shortage. Even once inflation is brought under control, the UK economy risks a continued period of faltering growth unless it can invest significantly and quickly in both technology and skills.
In our flagship Market Trends and Forecasts report, we observed growth of 9.3% in the UK Software and IT Services (SITS) market during 2021. Furthermore, we expect demand for digital, data and technology services to persist, as the geopolitical and macroeconomic environment pushes technological transformation up the agenda of many end-user organisations. And so, we are forecasting a compound annual growth rate (CAGR) of 5.9% in the UK SITS space through to 2025.
In this HotViewsExtra article, I explore how the UK's precarious economic situation represents an opportunity for the UK tech sector to deliver - or even exceed - those growth predictions. But to do so, it must navigate its own challenging labour shortages. HotViewsExtra subscribers can read the full analysis here.
And clients of the TechMarketView Foundation Service research programme can access the full Market Trends & Forecasts report here, covering all segments of the SITS market in considerable depth. If you would like to discuss subscription options, please contact Deb Seth.
Posted by Tania Wilson at '19:09' - Tagged: markettrends skills employment productivity MarketForecasts resilience macro marketdata
An increase in the volume of technology initiatives amongst UK financial services organisations gained momentum during 2021 as demand for SITS spiralled. The appetite for digital adoption, technology modernisation and business process change helped fuel historically high levels of growth in the market.
As organisations look to transform their operations, the pivot to New technologies is becoming increasingly pronounced as investments in Digital, Platform, Cyber and SaaS fuel growth. Meanwhile, Heritage elements continue to decline. The varying fortunes of SITS vendors reflects these trends as does the ability of providers to service the evolving needs of the market.
Subscribers to FinancialServicesViews can learn more via UK Financial Services SITS - Suppliers, Trends and Forecasts 2022. This report analyses the business and technology trends impacting UK financial services and includes TechMarketView’s detailed forecasts for SITS spend within the industry. The analysis also provides a ranking (by revenue) of the Top 20 vendors and examines the varying fortunes of this cohort.
If you would like access to this or any other of our resources, please contact Deb Seth for more information.
Posted by Jon C Davies at '07:00' - Tagged: financialservices insurance banking financialmarkets wealthmanagement
Complete the following: “If you spend more than you earn …”
It’s a sad fact of life that few start-ups make it for the long haul. The main reason is usually that they run out of cash. Applies to established businesses too, of course.
However, one entrepreneur is taking a unique approach to try to save his business. He’s James Jenkins-Yates, founder and CEO of London-based Airbnb host management services platform, Houst (formerly Airsorted). Jenkins-Yates announced yesterday that Houst has reached agreement on a Court-sanctioned Restructuring Plan, apparently the first SME to pursue this path.
TechMarketView subscription service clients and UKHotViews Premium subscribers can read more on UKHotViews Extra.
Posted by Anthony Miller at '09:27' - Tagged: funding startup
The Business Process Services market remains cyclical, strongly impacted by macro trends and developments. Some of these factors have been supportive of an outsourced model of delivery, notably skills and labour shortages with client organisations struggling to scale as they recover from the impact of the pandemic.
The labour and skills ‘pinch’ in particular, has become a driver for outsourcing at a time when many organisations are re-examining their operating models, looking to invest in digital transformation initiatives. The use of third parties remains critical to driving through such change and the most digitally able BPS providers have certainly benefited. Changing working patterns and increased use of data, analytics and automation as operations look to become both more intelligent and resilient, have also benefited BPS providers.
Subscribers to TechSectorViews can read the full analysis of who's hot and who's not, and why, in our new UK Operations: BPS Supplier Rankings report
The largest BPS operations players experienced a bounce back from COVID in 2021 with the ‘Top Twenty’ largest suppliers growing by an aggregate of 8.4%, having declined by -2.8% the previous year. Whilst headwinds such as contract attrition, insourcing, service decoupling and price competition all still exist, BPS suppliers have benefited from investment targeted towards digitising client operations, an increasing shift towards supporting revenue enhancement and the deployment of a new generation of services expanding the scope of BPS offerings.
TechSectorViews subscribers can download the report here. For information about how to access this report and find out about our other content and services please drop Deb Seth an email.
Posted by Marc Hardwick at '10:22' - Tagged: rankings report newresearch operations
What a difference a year makes in the current turbulent environment. The previous Enterprise Software ranking report depicted a sector displaying resilience and recovery in the face of the pandemic. The latest report reveals cautious yet confident suppliers generally thriving on organisations’ digital determination to build resilience to deal with recurrent shockwaves.
Download the latest edition of the Enterprise Software Supplier Ranking report to see what has changed and who has thrived - or not.
The Top 20 suppliers of Enterprise Software to the UK market saw an impressive 10.4% aggregate growth during 2021, double that of the prior year. Over half achieved double digit growth with a handful topping 20%. These growth rates are particularly startling given the low single-digit levels we have become used to. They reflect serial and overlapping disruptions - Brexit, pandemic, broken supply chains, war in Ukraine, energy supply concerns and rising costs, and inflation. The number and range of disruptions starkly illustrate how deep we are into unchartered territory with little visibility into future pathways and timelines. Execs tasked with navigating their organisations through these difficulties are investing in enterprise software as a way to build organisational ‘intelligence’ and be more responsive to change. There is a pressing need to build resilience and with software as an enabler, suppliers are feeling the benefit.
In addition to the ranking data, the report examines the many and diverse market accelerants and suppressants facing buyer and suppliers and the likely impact on software sector performance over the next three years. From motivation and organisational energy levels to the importance of taking care of your people, suppliers and buyers have both multiple levers that can be adjusted and challenges to overcome.
Eligible TechMarketView clients can download the report here. For information about how to access this report and find out about our other content and services please drop Deb Seth an email.
Posted by Angela Eager at '18:22' - Tagged: software rankings
Overall control of the London Borough of Barnet was one of the Labour Party’s biggest scalps in May’s Local Elections. Barnet had long been controlled by the Conservative Party who back in 2012 had undertaken one of the largest and most ambitious outsourcing arrangements in Local Government as it moved towards a ‘commissioning council’ model. Fast forward ten years and the London Borough has now voted to bring its remaining outsourced services back in-house by 2026, as it puts in place a road map to end its strategic partnership with Capita.
Ten years ago, Capita signed one of the largest and most comprehensive outsourcing arrangements in local government that saw large swathes of Barnet’s services put into the private sector (see here). The arrangement known as the One Barnet programme (and nicknamed “EasyCouncil” in the local press as Barnet moved to delivering a basic ‘no frills’ service ala EasyJet) saw Barnet sign two large multi-year contracts with Capita. The first covered corporate services such as HR, finance, IT, and estates, as well as customer services and revenues and benefits, whilst the second (a partnership known as Regional Enterprise or RE for short) runs a range of regulated services including highways, planning, regeneration and development, and environmental health.
UKHotViews Premium and research subscribers can read the rest of the article here.
For more information about TechMarketView's subscription services please contact Deb Seth.
Posted by Marc Hardwick at '09:21' - Tagged: contract insourcing local+government
It’s not hard to find evidence of our 2022 Research Theme – Building Resilience – playing out in the UK technology market at the moment. It’s why we had little trouble lining up some fascinating speakers on the topic as part of the panel debate at our up-coming TechMarketView Evening. One of those speakers is David Moran, leader of Arup’s UK digital transformation advisory team. One of his ‘hats’ sees him leading the growing domain of digital rail. He is passionate about how digital transformation can deliver improvements in asset management and safety – and, therefore, resilience - in the industry.
So, I was intrigued when another friend of TechMarketView, David Harris, previously CEO of Purple Secure Systems, before it ended up in the hands of CACI, let me know that he’d been Chairman of a start-up called One Big Circle for the last couple of years. The company’s innovation is focused on that same space. Founded in late 2017, by Barnaby Kent, Emily Kent, Ian Packer and Sam Low, the company’s mission is to “create intelligent video solutions in challenging industrial environments to improve safety and efficiency”.
The company has made some impressive progress. At the beginning of its last financial year (to 31st March 2022), One Big Circle had just developed and launched its AIVR (Automated Intelligent Video Review) product – a rapidly deployable end-to-end system providing instantly accessible video for visual review and Machine Learning (think Google Street View for rail). It had 11 FTEs, was set up in a small incubator (Bristol’s Engine Shed), and most of its income had come from innovation funding with Network Rail.
Just a year later, the number of employees has grown to 24, the company has relocated to a far larger facility in Bristol, and turnover has nigh on tripled to £2.7m.
TechMarketView subscribers can read more about the company’s solution, its journey so far, and its ambitions for the next five years in our latest UKHotViewsExtra article: One Big Circle – Making waves in the rail industry. If you are not yet a subscriber or are unsure if your organisation has a corporate subscription, please contact Deb Seth to find out more.
Posted by Georgina O'Toole at '10:00' - Tagged: iot video data rail digitaltwins
With the TechMarketView Evening 2022 now just over two months away on 22 September, we are excited to bring you further news of the event and introduce our guest speakers.
As in prior years, we’ll begin the evening with a Welcome Drinks Reception, supported by InterSystems – an opportunity to relax and catch up with your peers, entertain your guests and make new connections over a selection of drinks and canapes.
We’ll then make our way into the auditorium at RIBA for an hour of insight and analysis led by the expert TechMarketView team. The theme for the event mirrors TechMarketView’s research theme for the year, Building Resilience. Throughout the evening, you’ll be treated to a fireside chat, panel debate and a mix of presentations that explore the theme and the resulting trends and opportunities in the UK tech market.
We are particularly excited to introduce our partnership with the Surrey Institute for People Centred-AI, based at Surrey University, which brings together world-leading AI and domain expertise to realise and shape AI impact for public good. During the evening, the Institute’s Dr Andrew Rogoyski will be chatting to TechMarketView Research Director Duncan Aitchison to explore how AI can support national, organisational, and individual resilience.
We are equally delighted to have Melissa McBride, co-founder and CEO of Sophia Technologies, and David Moran, Digital Strategy and Transformation lead at Arup Digital UK, joining TechMarketView’s Georgina O’Toole, Marc Hardwick and Dale Peters for a panel debate addressing the question of how advances in technology will impact the resilience of government, corporates, and society. Our guest speakers are experts in their fields, with Melissa helping to shape the next incarnation of education in the Metaverse through UK edtech start-up Sophia, and David leading the digital visualisation of the UK’s railways (amongst other things!).
Before and after these sessions you’ll hear from TechMarketView’s Chief Research Officer, Kate Hanaghan, and Managing Director, Tola Sargeant, as we analyse the impact of recent events on both end-user organisations and tech companies and consider the outlook for the UK tech market. Throughout the evening we’ll be showcasing brand new research from the TechMarketView team on topics including workforce resilience, healthcare resilience and supply chain resilience, including the role of cybersecurity.
To finish, we head upstairs to the beautiful RIBA dining room for a sumptuous three-course dinner and another opportunity to discuss the evening’s insights with your peers, entertain your guests and make new connections.
Don’t miss the chance to book your place at an event that has been described by many a UK tech CXO as unmissable!
BOOK NOW
With grateful thanks to our sponsors:
Posted by HotViews Editor at '09:08'
Out now is TechMarketView’s latest UK SITS Ranking 2022 report. Based on in-depth analysis – and applying TechMarketView’s unique understanding of the UK’s competitive scene – UK SITS Ranking 2022 covers a wide range of players from around the world. From hyperscalers to heritage-resellers, and SaaS providers to management consultancies and system integrators, TechMarketView’s supplier analysis is both deep and broad.
The report shows that TCS has retained its position as the largest provider to the UK market. The Mumbai-headquartered firm displaced Capita from its long-held top spot last year and has since managed to hold off the wave of fast-growing competitors. At almost £3bn, TCS is large as well as fast-growing. However, all the UK’s top five largest SITS providers can also boast revenues of over £2bn and double-digit growth – with the exception of Capita, which grew 3.1%.
UK SITS Ranking 2022 shows the hyperscalers are now a very firm fixture of the leading set of players, with both Amazon Web Services (AWS) and Microsoft chasing hot on the heels of TCS. Indeed, it is possible TCS will lose its top spot as soon as next year to one of them.
The Top 30 SITS vendors as a group generated UK revenue of c.£39bn during 2021, reflecting growth of 10.5%. Meanwhile, the median growth rate for the Top 30 vendors represents a combined revenue increase of 10.15%. The figure illustrates a marked improvement in fortunes compared to the prior year when the median growth rate was just 0.4%.
Subscribers to TechMarketView’s Foundation Service can download the complete report here: UK SITS Ranking 2022. Read more about its sister report, Market Trends & Forecasts, here: SITS market reaches historic highs. If you do not have access to the Foundation Service programme, please contact Deb Seth.
Posted by HotViews Editor at '09:50' - Tagged: rankings competitoranalysis competitivelandscape
That entrepreneurs need to be ambitious should be a given. If they are articulate too, then that’s a real bonus. Which is another reason I was impressed when I spoke to Steven Frost. He’s the founder and CEO of Work Buzz, the Milton Keynes-based employee engagement start-up I wrote about a week or two ago (see Work Buzz gets more dosh to engage more employees).
What I missed telling you then was his back story, which I alluded to referring to his time in financial services. Frost made the jump into tech through his dream of running his own ‘franchisee engagement’ business, helping franchise brand owners keep a finger on the happiness pulse of their franchisees. This morphed into the ‘full-fat’ employee engagement platform that became Work Buzz.
Posted by Anthony Miller at '08:12' - Tagged: startup
It has been a dismal quarter for tech stocks. Markets crashed in April, with inflationary fears taking hold. After some respite in May, June was another terrible month for all the indices we track, with every index posting losses.
Overall, the tech-heavy NASDAQ fell 22.4% quarter-on-quarter (QoQ) during Q2. The UK's FTSE Software and Computer Services (SCS) index fared worse in June than it had in May, which was in turn worse than April. It fell 14.3% in Q2 but that added to a steep Q1 decline, to leave it down 26.3% year-on-year (YoY). Even the FTSE 100, relatively steady for much of 2022 and indeed a beneficiary of the continued weakness of Sterling against the US Dollar, faltered during June. It ended 4.6% down QoQ, as fears of an economy-wide downturn spooked investors.
Subscribers to the TechMarketView Foundation Service and UKHotViews Premium can read more by downloading the Q2 2022 edition of IndustryViews Quoted Sector. Or for detailed commentary by month, see Share Performance in June 2022 and work back.
Posted by Tania Wilson at '14:53' - Tagged: markets
We recently spoke to Mastek’s Sector Lead for Secure Government Services, Ashish Julka. His opening sentence: “We’ve been busy; actually, busy is probably an understatement”.
A list of recent contract wins serves to highlight the level of activity that Mastek is seeing in UK Government. The Total Contract Value (TCV) of recent wins totals £65m. A big chunk of that value is attributable to its longest-running client relationship: with the Home Office (£56m in total). But, crucially, Mastek’s success sees its entrée into a new Whitehall ‘logo’: the Department for Work and Pensions. Moreover, a successful bid to be included on the new Digital Specialists and Programmes (DSP) framework means that the company has established a strong platform to attract more new clients over the years ahead.
In UKHotViewsExtra, we look more closely at each of the contract wins, the winning factors in its bids, and the company's foundations for future growth in Whitehall. TechMarketView subscribers can read this latest research note here: Mastek: Targeted central government investment bears fruit). If you are not yet a subscriber, or are unsure if your organisation has a corporate subscription, please contact Deb Seth to find out how to access this analysis and more.
Posted by Georgina O'Toole at '07:03' - Tagged: contracts framework public+sector central+government
TechMarketView’s new Market Trends & Forecasts 2022 report shows the UK Software and IT Services market hit growth of 9.3% in 2021 – the highest for many years. But as we continue to live through uncertain times, what is likely to happen to market opportunities this year and beyond?
Georgina O’Toole, Chief Analyst at TechMarketView, commented: “The geopolitical environment and macroeconomic picture have pushed digital transformation higher up the agenda of many end user organisations. Investment in tech is seen as one way for organisations to become more resilient - from investing in AI and automation to mitigate against skills shortages, to investing in supply chain management technologies to provide better data analytics and visibility, to investing in business intelligence for improved strategic and operational planning. Last year, SITS market growth rate peaked at 9.3% as a result.”
While we do not expect this rate of growth to be matched in 2022, we are predicting a consistently strong SITS market through to the end of our forecast period in 2025. Our latest Market Trends & Forecasts 2022 explains why and describes in depth the trends that are driving market behaviours.
O’Toole added: “Our 2022 Research Theme – Building Resilience – has looked more and more appropriate as the year has progressed. Uncertainty has become the norm and organisations are increasingly focused on being prepared for future – high impact – events. This is driving organisations, in both the public and private sectors, to accelerate their digital transformation programmes.”
For more than a decade, the TechMarketView Market Trends & Forecasts reports have guided buyers and suppliers as they navigate change, opportunity, and challenge. Such is the demand for our market data and trends analysis of the UK Software and IT Services (SITS) market, that since 2020 we have published an in-depth report in Summer followed by a Market Outlook Update in the Winter. Furthermore, with a current global backdrop characterised by such uncertainty, there has arguably never been a time when gaining market insight is so important.
The TechMarketView Market Trends & Forecast report has been authored by our team of market experts. It covers market forecast and growth rates to 2025 and explains market trends by services type (Consulting Solutions, Operations) and across industry sectors (both Public Sector and Commercial).
Can you afford NOT to read it?
Clients of the TechMarketView Foundation Service research programme can access the report here: Market Trends & Forecasts 2022.
If you do not have access to the Foundation Service programme, please contact Deb Seth.
Posted by Kate Hanaghan at '09:45' - Tagged: markettrends marketdata marketanalysis
Analysis by TechMarketView of the Software and IT Services (SITS) competitive landscape shows that TCS has retained its position as the largest provider to the UK market. The Mumbai-headquartered firm displaced Capita from its long-held top spot last year and has since managed to hold off the wave of fast-growing competitors.
At almost £3bn, TCS is large as well as fast-growing. However, all the UK’s top five largest SITS providers can also boast revenues of over £2bn and double-digit growth – with the exception of Capita, which grew 3.1%.
Based on in-depth analysis – and applying TechMarketView’s unique understanding of the UK’s competitive scene – UK SITS Ranking 2022 covers a wide range of players from around the world. From hyperscalers to heritage-resellers, and SaaS providers to management consultancies and system integrators, TechMarketView’s supplier analysis is both deep and broad.
Subscribers to TechMarketView’s Foundation Service can download the complete report here: UK SITS Ranking 2022. Read more about its sister report, Market Trends & Forecasts, here: SITS market reaches historic highs.
Posted by HotViews Editor at '07:45' - Tagged: rankings competitoranalysis competitivelandscape
TechMarketView’s new Market Trends & Forecasts 2022 report shows the UK Software and IT Services market hit growth of 9.3% in 2021 – the highest for many years.
While the rate of growth will ease in 2022 from this high, TechMarketView is predicting a consistently strong SITS market through to the end of our forecast period in 2025.
Can you afford to not read it?
Clients of the TechMarketView Foundation Service research programme can access the report here: Market Trends & Forecasts 2022. If you do not have access to the Foundation Service programme, please contact Deb Seth.
Posted by HotViews Editor at '09:33' - Tagged: forecasts growth marketdata
Summary
After some respite in May, June was another rough month for all the indices we track, with every index posting losses. Most of the damage was done by mid-month, largely due to market fright at higher-than-expected US inflation data (see my mid-month article here).
Stocks rallied during the second half of the month, only to fall again in recent days on the back of weak US consumer confidence data. This indicated consumers believe prices will continue to stay high, even as central banks tighten monetary policy to curb inflation. The data also presented a bleak picture of consumer sentiment on broader economic and labour market prospects.
The tech-heavy NASDAQ fell 8.7% month-on-month (MoM) during June, leaving it 29.5% down year-to-date (YTD). The UK's FTSE Software and Computer Services (SCS) index fared worse in June than it had in May, which in turn had been worse than April. It fell 6.5% MoM, leaving it down 28.6% YTD.
Even the FTSE 100, steady for much of the year and indeed a beneficiary of the continued weakness of Sterling against the US Dollar, faltered during June. It ended 5.8% down MoM and 2.9% down YTD, as fears of a downturn spooked investors.
It is an indication of overall downbeat market sentiment that of the 150 or so stocks we track for this column, fewer than 30 managed to avoid MoM losses during June.
Those that did perform strongly included healthcare software provider Emis Group (up 43.4% MoM), care management software specialist Craneware (up 30.5% MoM), recruitment and professional services business Parity Group (up 19.6% MoM), robotic process automation specialist UiPath (up 6.6% MoM) and business process outsourcer Capita (up 5.3% MoM).
The US Big Tech companies all lost out, contributing significantly to the fortunes of the NASDAQ, with Netflix now down an eye-watering 71.0% YTD.
Some of the many other losers outside Big Tech included analytics-as-a-service provider Actual Experience (down 72.5% MoM), French multinational Atos (down 47.7% MoM), e-commerce retailer THG (down 43.7% MoM), online car retailer Cazoo (down 46.7% MoM) and enterprise software giant Micro Focus (down 25.0% MoM).
More detail on the Winners and Losers is available in Share Performance in June 2022 for HotViews Premium readers.
Inflation continues to be a significant concern with rates running well ahead of central bank targets. Interest rates are by now rising in response but much of the inflationary pressure is caused by supply chain disruption and so is largely beyond the reach of monetary policy.
Whilst the markets have by now priced in further interest rate rises, any unexpectedly high jumps in inflation rates are causing jitters. And the more the bad news on inflation piles up, the more consumers believe it is here to stay and act accordingly. An already tight post-Covid labour market is leading to announcements of sizeable wage increases. And those pay rises are in turn making it more likely that inflation will persist. (TMV subscribers can read my analysis of the latest UK employment data and what it means for the tech sector here).
Meanwhile early signs of economic slowdown are emerging, meaning central banks could soon have the task of trying to tighten monetary policy into slowing economies.
All of this is the perfect recipe for further volatility, with growth stocks in particular set to suffer if runaway inflation requires unexpectedly high interest rate hikes. But even the steadier value stocks, such as those on the FTSE 100, will suffer if economies do indeed slow and demand drops.
Faced with this turmoil, tech companies must continue to focus on communicating with their boards and investors around strategies for managing cost, generating recurring revenues and achieving or improving profitability.
And whilst the corporate sector can regrettably do little to stop the devastating conflict in Ukraine, they can and must double down on efforts to ease domestic labour constraints - for example, by offering flexibility where possible to attract back those currently not engaged in the workforce. For it is becoming increasingly clear that the scramble for talent in a tight labour market will play a significant role in the economic story of the coming months.
Posted by Tania Wilson at '11:47' - Tagged: markets macro
