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A look inside Europe’s $7 abundance technology market

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A look inside Europe’s $7 abundance technology market

Sinch, Adyen, Fortnox, and TeamViewer are Europe's best-performing tech stocks this year

There’s no doubt US tech stocks have thrived in 2020, but a raft of their European counterparts have alternate huge profits for investors during the first six months of this year.

Sinch, the Stockholm-based cloud telecoms firm, is up a teeth-kissing 170% year-to-date. Second-best is Dutch fintech play Adyen: its market cap grew from $223 billion to $389.4 billion, active its stock price up by 74%.

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The NASDAQ 100 (NDX) is frequently used as a criterion for the US tech industry. 17 tech firms in Europe have outperformed the NDX this year.

Swedish accounting gem Fortnox just beat Germany’s TeamViewer for third place, but they were close, both up around 52% in the past six months. It’s far less than its US analogue Zoom Video, but still impressive.

Dutch tech stocks lead Europe in 2020

In a bid to map Europe‘s 6.12 abundance ($6.95 trillion) technology market, Hard Fork analyzed the 72 companies listed as “Information Technology” in the MSCI Europe Investable Market Index, as tracked by BlackRock’s agnate iShares ETF. It follows almost 1,000 stocks of all kinds across Europe.

MSCI notes that its IMI market index represents “99% of the free float-adjusted market assets across the Developed Markets countries of Europe.” A number of European countries are absent from the IMI market index; many are classified as “emerging markets,” so they were not included in this analysis.

The heat map below shows abounding growth of each country’s technology market values. Countries in the centermost blues are home to tech firms that added the most value to their market caps. Those in the red hue have lost value in 2020.

Turns out, Holland’s four tech companies put their nation way ahead of the rest of Europe. Previously mentioned Adyen grew 74.64%, accurate by a trio of semiconductor firms: ASM, ASML, and BESI, which grew 34%, 21%, and 11% respectively.

This gave the Netherlands a growth rate of just under 30%.

Italian fintech bounden NEXI’s value swelled by more than 22% this year, which pushed its native citizenry to second place. If its public tech companies were the entire nation, Italy would’ve grown by more than 17% this year.

The method

The growth of each country is value-weighted, much like the S&P 500 stock index. With this method, companies with the better market values (traditionally the most “stable”) affect the growth rate of their country the most.

Take Finland, home to two public tech companies with vastly altered market caps: phone lords Nokia with $24.72 billion; and IT wizards Tieto with a little over $3 billion. The boilerplate market cap of those two companies gives Finland’s abounding market value.

(24.72 billion 3.1 billion) / 2 = (Finland’s abounding market cap)

Nokia’s market value grew by 12.35%, while Tieto’s is down 12.71%. But, after comparing Finland’s abounding market cap at the start of the year to the end of June, Finland ends up announcement a growth rate of 8.72%.

After all, Nokia is a vastly bigger company, so its growth should be worth more to Finland overall.

Unfortunately for Spain, lacklustre performances from its two public tech companies put it at the bottom of the rankings for at least the first half of 2020.

Dominion, IT casework provider for engineering sector, shrunk by 24%. Fellow IT casework firm Armadeus was hit worse, likely due to its affiliation to the global travel and tourism industry; its market value more than halved this year. This gave Spain a growth rate of -49%.

Using the same method to criterion Europe‘s tech market as a whole, we found its growth rate for the first half of 2020 to be -6.8%. You can check out Hard Fork’s European tech stock spreadsheet in full here.

Still, there’s been loads of befalling in Europe this year, but odds are you would’ve found it in the Netherlands. Super lekker.

Published July 3, 2020 — 09:17 UTC

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