Shares digital

Misys (MSY) 172p

Software and banking group Misys believes growth in Asia will protect it from economic uncertainty in the UK and US. (Read the full story: www.sharesmagazine.com/node/3034)

Shares says: It might be upbeat on trading outlook but banking exposure remains a worry and the healthcare arm is still struggling. The shares have priced in bad news but investors mustn’t be comfortable that the current sales growth momentum will continue. HOLD

The Times says: That a company that draws nearly three-quarters of its sales from the banking sector can remain so upbeat is undoubtedly encouraging. Aside from its relative resilience – licence sales mean that 60% of revenue is recurring – Misys is benefiting from its push into territories so far protected from the credit crunch, such as India, China, the Middle East and Russia. However, initial licence fees in the treasury and capital markets division were off 23% – Misys says they would have been flat but for a big order after its half-year cut-off. It is hard not to feel that banking’s woes will bite. SELL

The City - Investec says: The first stage of the group’s restructuring has been broadly successful and the shares are now looking more sensibly valued. The second phase will involve achieving sustainable initial licence fee growth. Before turning more positive we would want to see greater clarity that the banking market environment remains stable for the business and that its new product plans are gaining traction with its client base. HOLD