Look Abroad for Software Stocks: Portfolio Manager
Economic numbers continue to indicate a slowdown -- if not already a recession -- in the U.S. -- and technology investors should start looking to other continents for good bets, one portfolio manager told CNBC Europe Monday.
Ioannis Papassavvas, portfolio manager at Allianz Global Investors, suggested investors reduce positions in U.S. software and look to Europe and Asia for better value in financial and entertainment software companies.
Financial software companies will benefit from the recent crisis in the financial sector, Papassavvas said. Those companies spend 20-25 percent of their revenue on in-house IT systems and that the recent scandal at French bank Societe Generale could have been avoided had the company incorporated an outside software system provider so that the trader could not have changed his positions manually.
"I think if one can use proper technology there, proper software that can monitor that and you are not able as a trader to change things manually, I think a lot of bells would have started ringing sooner than they finally did," he said.
Paspassavvas pointed to Swiss financial software company Temenos, which is already hiring more employees to deal with greater demand.
German heavyweight SAP could also benefit, with shares cheaper after following the overall market down.
And Asian entertainment software companies that offer pay-to-play online gaming are 50-60 percent cheaper than their U.S. counterparts, he said.
Papassavas likes NHN Corporation, Giant Interactive, Forthnet and Nintendo.