Analyst says good news for Canadian tech companies

One Canadian analyst is predicting that despite a gloomy outlook reported by many Canadian tech. companies so far this year, the worst may be over.

Subodh Kumar, CIBC World Markets’ chief investment strategist, said markets are now beginning to recover from the post-traumatic stress of bear-ravaged technology stocks and this means good news for high tech. manufacturers.

Kumar likened the results of the fizzle that put many investors off tech. stocks and resulted in many companies holding back investment into IT-related projects as the after effects suffered by an accident victim.

Investors have been moving in and out of both aggressive and defensive stocks unsure of where they are in relation to the market, Kumar said. However, a new cycle is underway, Kumar said, with the markets having established their lows in early April, and the new cycle begun in anticipation of an improvement in earnings.

Investors are settling down, Kumar said, reassured that while inflation is not low; it’s not scary either.

Kumar suggested that utilities and financial stocks, having been strong, indicate a new market cycle, and that all cyclical stocks and technology stocks, such as software and media, are the most attractive sectors for investment as investors build in better prospects for 2002.

CIBC World Markets, in Toronto, can be reached at