Monday, October 6, 2008

Indian Tech Companies and Recent Downturn in Markets

Tech companies from India lost more than double the amount the overall market lost in the last month. No surprise this happened, as Financial Services contributed ~19% of the technology spending in 2007. Surprisingly, these tech companies lost more than what the financial companies lost.

Of the 1.3 billion that companies spent on information technology in 2007, about $1 of every $5 came from the financial sector. The break-up goes like this:

- Government: 13%

- Financial Services: 19%

- Manufacturing: 12%

Source: Fortune Oct 13, 2008

More pain to come !

Total household networth in the US at the end of the Second Quarter of 2008 was $56 trillion.

From 2002 through the end of 2007, US household networth rose from $39.2 trillion to $58.7 trillion.

The housing correction of $2.7 trillion from end of 2007 to second quarter 2008 was marginal, compared to the $19.5 trillion rise it saw from 2002 to 2007. We have lot of correction to take place from now and in the next few years.

Considering that only 5 US equity mutual funds (out of 9,100) had positive return YTD (as of Sep 17, 2008), it's hard to digest how much pain we are yet to see.

Data Source: Fortune Oct 13, 2008