They are almost symmetrical: in Marsh MSCI Healthcare index gained 2.71% and during the same period MSCI Technology hardware & equipments index lost 2.36%... The fact is that among TMT segments, hardware is the market with the biggest difficulties. During the 3 first months of the year, this index has lost 8.61%, almost the worst performance of all the sector MSCI indices just behind Automobiles index (-13.40%).
Low demand from companies coupled with hard competition in this sector, especially coming from low-cost manufacturing Asian countries, put a big pressure on computers man
ufacturers and their shares just continue to be avoided by investors.
Compared to that, the media sector appears relatively safe. Its MSCI index dropped only 1.50% in Marsh, much less than during the 2 first months of the year. Investors are not really more enthusiastic about the media sector which is strongly dependant of the global economic environment. But it seems that the valuation of the sector is already low and doesn't have much potential of downturn.
In this context, the telecommunications shares reacted rather well in Marsh. The MSCI Telecom services index lost 1.32%. As usual since many month, the mobile operators benefit from a positive environment: this market experiences a regular growth and succeeds in introducing news services like SMS. In the contrary, fix operators are still suffering. They are hurt by an absence of real growth of their market, plus their heavy debts.
Outlook
It seems there is no reason to be over-optimistic on the TMT sector. TMT is just like any other sector suffering from the economic downturn. The positive point is that TMT doesn't suffer anymore more than the other sectors…
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