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Technology Stocks : Cognicase (COGI, T.COG) - Integrated IT Solutions

COGI 4.550

+8.3%

Jul 18 5:00 PM EST

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To: Kevin Michael who wrote (442)	7/23/1998 12:31:00 PM
From: BM	Read Replies (2) of 843

The CDN dollar has in fact been fluctuating against the US dollar so it hasn't been a straight drop. In Dec 1997 it was over 70 US and drifted down to the 68.5 range in Feb and back up to 70.4 on March 31 and now back down under 67. The current situation has been made even worse by the Canadian gov't who (unlike Greenspan who plays his cards close to the vest) have tipped their hand that they will not intervene to support the dollar - currency speculators have been given an edge as foreign investors dump loonies to buy greenbacks. Hence experts are now predicting a further drop to the 65 area. Of course since we're talking millions of dollars for a company like Cognicase, this isn't small potatoes (hope I spelled that right Mr. Quayle!) Other than the issue of S&GA expenses being in CDN while revenues are in US, the other factor that may contribute to the flucuations from Cognicase's perspective is the pot of U.S. cash they got (and still have) from the original IPO. I say "may" because I don't know if they have kept this in US dollars or how this comes into play on an income statement, versus a balance sheet. Perhaps management should consider (if they haven't already) hedging against currency fluctuations. But then that's a subject for a separate finance/economics class I'll leave to Risky's pedagogical skills. :-)

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