Kiwi IT sector gets new index

By Phil Boeyen, ShareChat Business News Editor

Tuesday 8th August 2000

New Zealand now has its own IT index. The index - called 4i - has been launched by Aussie tech company, Solution 6, and will track the performance of publicly listed Internet and Information Technology stocks.

Until now, no index has provided an industry specific benchmark for New Zealand's fast growing publicly listed IT sector.

4i draws its constituents from the 23 IT companies listed on the New Zealand Stock Exchange's Main board, Unlisted Market and New Capital Market.

Solution 6 spokesman, Adam Rands, says 4i will deliver a reliable performance measurement of the kiwi tech sector and will be of use to all sections of the investment community.

"We expect 4i to be a benchmark from which the New Zealand IT industry can be measured against the performance of the wider market".

Mr Rands says 4i started at a base of 1000 on January 1, and peaked at 1142.33 in March. It hit a low of 805.96 at the end of May and currently stands at 955.34.

He says 4i is a weighted index with the stock movements of the larger listed companies having a greater effect upon the value of the index than the movements of the smaller players. However due to the great disparity of the capitalisation of securities within 4i the weighting of larger constituents is artificially limited.

"This ensures that the index more accurately reflects the status of New Zealand IT stocks and the local IT industry. Unlike most indexes, the weighting of any one stock within the index cannot exceed 15%. This removes the heavy bias from the larger capitalised stocks and allows the movements of smaller IT companies to be reflected in the index."

Telecom is the largest company in the index and NZIJ is the smallest.

Mr Rands says the 4i website (http://4i.co.nz/) displays the latest index value and all other details. It will be updated every 5 minutes during the NZSE's trading day, from 9am to 4pm.

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