Software testing firm SQS Software Quality Systems AG says that new contract wins show that confidence is improving in the software sector. The contracts cover a UK utility company, a UK retailer, a European air traffic control agency and two European banks. The SQS managed testing service is proving popular. Swiss bank St Galler Kantonal Bank has signed a five year managed testing services agreement. Other contracts run through into 2010. Aim-quoted SQS is the largest independent software testing company and it warned earlier in the year that trading was weak. These new contracts show that confidence is starting to return to the software sector. This is something borne out by the trading statements of many small software companies. Shares in SQS jumped 9p to 194p each on Monday. The share price has risen by more than one-third in the past three months but it remains nearly one-quarter lower than one year ago. Broker Panmure Gordon forecasts a fall in underlying profits from €13.1m to €7.7m in 2009. The shares are trading on around ten times prospective earnings for 2009.