Institutions invest $3.2 billion more in equipment sector

Institutional investors increased their positions in the telecom equipment sector by about $3.2 billion in the fourth quarter, according to Susquehanna Financial Group analyst Joe Chiasson.

Institutions managing $100 million or more (not counting mutual funds) upped their investment in telecom equipment by $11 billion in the quarter while others pulled out $7.8 billion, resulting in a net capital inflow of about $3.2 billion, or 2.17%.

The increase contradicts recent trends, Chiasson said, so institutions are likely to decrease their overall investment in telecom equipment in the first quarter of 2005.

Interest in VoIP and broadband access equipment is being partially offset by concerns over declines in traditional circuit-switching, the possibility of Chinese vendors depressing the market’s prices and the impact of big-carrier consolidation on carrier capex, Susquehanna Financial said.

The biggest increase in institutional telecom equipment investment came from Alliance Capital Management, which upped the value of its holdings by more than $856 million, or 22%, to about $4.8 billion. The biggest seller was Putnam Investment Management, which sold more than $147 million, or 8%, of its holdings in the quarter.