Higher North American rates negative for technology sector

Rising US interest rates are undermining investor confidence in the technology and telecoms industry. US rates now stand at 4%, having risen 12 times from a low of 1% in mid-2004, sparking fears that companies could be encouraged to reduce capital expenditure. Both Sarasin and Clariden think this process has already begun. The MSCI World Telecom Index shows a decline of 7.26% in the year to the end of October 2005 compared to a rise of 17.38% for 2004. Phillip Sundquist, fund manager of the Guernsey Oeic Clariden Communications Equity Fund, is cautious about the technology and telec...