Dow Jones Newswires -- April 13, 1998
Industry Strength Pushes Syntel To 52-Week High
By Nancy Beiles
NEW YORK (Dow Jones)--Strength in the information technology sector and the
expectation that Congress will ease entrance rules for foreign high-tech workers
have propelled Syntel Inc. (SYNT) shares to a new 52-week high.
Syntel shares traded as high as 59 5/8 Monday. The previous high of 56 3/4 was set
April 9, during a trading session in which Syntel gained 10.9%. Syntel shares
recently were trading at 56 3/8, up 3/8, or 0.7%, on volume of 425,700 shares,
compare with average volume of 290,200.
Analysts attributed the stock's momentum to broad industry issues rather than to
any new developments with the Troy, Mich., information technology
outsourcing company.
Steven Birer, an analyst with BancAmerica Robertson Stephens, noted that the
information technology industry as a whole is doing well. Companies in Syntel's
peer group, like Information Management Resources, also have posted solid gains
of late, Birer said.
He also said investors seem to be expecting that congressional action to increase
the number of foreign workers who can enter the U.S. will greatly benefit
information technology companies.
Birer said he views the prospect of Congress increasing the number of foreign
workers who can enter the U.S. annually to about 90,000 from about 65,000 as a
"neutral to positive event" for Syntel.
Syntel, like many other high-technology companies, relies heavily on
foreign-born workers because of the dearth of highly skilled technicians in the
U.S.
Kama Krishna, an analyst with Laidlaw Global Securities, said Syntel could be
benefiting from a greater investor awareness of the strength in the outsourcing
area.
Businesses are turning to outsourcing companies to prevent computer glitches in
the Year 2000. Even when that business disappears after the new millenium,
Krishna said, other projects will take its place. One is the conversion to the Euro,
which will require vast computer system shifts, Krishna said. In all liklihood,
many businesses will turn to companies like Syntel to aid in that conversion.
"People have realized that outsourcing is a very hot area," Krishna said.
A company official wasn't immediately available for comment.
-Nancy Beiles; 201-938-5393 |
