Technology stocks will become an important part of the Irish equity market index before the end of the decade, according to NCB stockbrokers. In its report, The Technology Sector - An Introduction, NCB says the success of Iona Technologies and CBT Systems on the NASDAQ has developed a "better understanding among local investors of the growth opportunities in the sector".

It says that before now the "evolution of a strong indigenous software industry has not been reflected on the Irish stock exchange".

According to the research report, "the pipeline of new companies is strong, with several Irish technology companies having global potential, particularly in the software area".

The report points out that the combined market capitalisation of Iona Technologies and CBT Systems quoted on the NASDAQ is $1.6 billion, equivalent to 3 per cent of the total value of the ISEQ.

Due to the shortage of technology graduates, the report says the indigenous software sector may be disadvantaged by "not being able to afford the re-numeration packages offered by the multinationals".

The potential present in the unquoted sector "looks promising" says the report.