This one is traded on TSE, Nasdaq soon
By Susan Taylor
OTTAWA, Jan 10 (Reuters) - Certicom Corp. shares scaled new
heights on Monday as investors viewed the announcement of a new
contract as another sign the software developer's encryption
tools will become an industry standard.
Shares rose C$30.50 in morning trade -- a gain of 28
percent -- to reach a new high of C$138 on the Toronto Stock
Exchange, continuing last week's streak.
Stock in Toronto-based Certicom gathered speed last week
after analysts at Yorkton Securities and Scotia Capital
upgraded their price targets.
The stock has risen an impressive 573 percent from its
close of C$20.50 on the Toronto market on November 1.
On Monday, Certicom <CIC.TO> announced that its technology
will be incorporated in Minneapolis, Minnesota-based Datakey
Inc.'s <DKEY.O> smart cards. No value was disclosed for the
deal.
Analysts said the market is reacting to another sign that
Certicom will become a technology standard, rather than to this
deal in particular.
Certicom sells security software and consulting services,
primarily to the wireless sector, for such gear as phones,
palm-top computers, smart cards and Internet content
protection.
U.S. buyers and Canadian momentum players are likely
driving the stock, said Paul Lechem, analyst at CIBC World
Markets in Toronto.
Investors are considering what Certicom would be worth if
it dominated the security market in such high-growth areas as
wireless and Internet devices and electronic commerce.
"Expectations are, and indications are, that they could
well be (the standard)," he said. "Yes there are expectations
that there's going to be some good announcements out over the
next few weeks, but I think it's really just a big-picture kind
of thing."
Certicom has already forged deals with such industry titans
as 3Com Corp. <COMS.O>, BellSouth Corp. <BLS.N>,
Hewlett-Packard Co. <HWP.N>, Motorola Inc. <MOT.N>, and
QUALCOMM Inc. <QCOM.O>.
Partnership announcements are expected within the next
week, said Brandon Osten, analyst at Sprott Securities in
Toronto.
"I think it's more just momentum right now," he said.
"There's a lot of good announcements coming and I think
everyone knows it at this point so the stock's moving up in
anticipation of those."
($1=$1.46 Canadian)
((Susan Taylor, Reuters Ottawa Newsroom, 613-235-6745, fax
613-235-5890))
REUTERS
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