According to Ross Jobber, technology analyst at Deutsche Morgan Grenfell: 'Investors are waiting to see if Azlan makes a turnaround. So the perception is that there is no need to buy ahead of tangible evidence of the recovery.' He added: 'There is clearly uncertainty as the case with SFO might have an adverse effect.'
Wayne Channon, chairman at rival distributor Ilion, said: 'Investors are waiting to see what happens. But the investigation is based on historical events.'
Commenting on Azlan's financial standing, Channon said: 'The current value contains the expectation that it will return to profit.'
The two distributors came to blows in the past when, in November 1997, Ilion was forced to issue a #2 million profit warning as a result of falling margins brought about by Azlan's financial troubles (PC Dealer, 26 November 1997).
Channon said the latest revelations would not effect Ilion's business: 'When it is concerned with trading then it does have an effect, but an investigation is completely different.'
But Jobber disagreed: 'Networking distributor became a dirty word in the City when the trouble with Azlan first started. But other companies like Computacenter, which sells PCs, are doing well at the moment.'
He added: 'The City is always looking forward. When Azlan released its figures in October, the shares responded quite favourably.'
A City source said: 'A lot of value has been lost in the stock market but big investors will see the substantial value in the new management team at Azlan.'
He added: 'People who bought the shares at 555p (the suspension price) still have them. But it is now a matter of seeing whether the shares will go up from 50p to 75p to 100p.'
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