Happy first birthday this week to Techmark, the London Stock Exchange index of technology shares.
Despite the last six months of volatility, over the course of the year the index has performed well, posting gains of 50% and outperforming both the Nasdaq in the US and the Neuer Markt, Germany's high-tech exchange.
The statistics make impressive reading. Since its launch, 71% of Techmark companies have seen an increase in their share price and 74% of IPOs launched on Techmark are trading above their issue price.
On top of this, trading volumes have reached 38,000 bargains a day with an average daily value of £2.8bn and more than £200m has been raised by Techmark constituents during the past year.
Not bad for an index that was greeted at the time as the LSE's last roll of the dice in response to the success of Nasdaq. Pre-Techmark, the worry was that too few London investors understood the subject well enough to give technology companies the valuations that could be obtained in the US.
This criticism is heard much less often now, with companies such as Arc International preferring to list in London and citing greater understanding of their business model in the UK as the reason.
Therefore, Techmark's major success has been to provide UK technology companies with a platform on which they can market themselves, and to improve the understanding of fledgling technologies and industries. From its launch with 181 companies it has now reached 240 with a combined market capitalisation of £652bn. And not just IT companies - biotechnology firms have benefited as well, with Cambridge Antibody Trust the best performing single constituent, up 1,800% over the year.
But where now? The LSE is currently fighting off a bid from OM Group, which falls far short of persuading LSE members either in terms of cash or sentiment. Hope remains high that a white knight such as Nasdaq will move in and take over the LSE, Techmark included, and bring the US giant's marketing skill to London.
In the meantime, Techmark is looking to internationalise its operations, attracting both overseas companies to list in London and foreign investors to buy UK technology company shares.
Although recently volatility in technology share prices has led to a number of pulled flotations (the latest of which is Internet hotel IX Europe), Techmark can count its first year as a success. When a more stable base is found, we can expect more and more UK technology companies to want to join the Techmark. I would expect the next year to be another successful one and would not be surprised to see the index post another 50% gain by this time next year.
Ian Mitchell is an IT analyst with stockbroker Beeson Gregory. His opinions should not be construed as investment advice.