Apple slowdown fears send shares tumbling across vast supply chain
WARNINGS that Silicon Valley giant Apple has slashed orders for iphone parts on expectations of sinking demand sent Welsh chip supplier IQE sliding yesterday.
Reports emerging out of Japan indicated that Apple expects iphone sales on new models to be 80m in 2018, with 20pc fewer parts needed compared to last year.
The Nikkei report knocked as much as 1.9pc off Apple’s market value in early trading in New York and weakened shares in companies along its vast supply chain.
Despite Apple boss Tim Cook urging investors in January to avoid reading too much into data emerging from its complex supply chain, shareholders dumped chipmakers across Europe reliant on the tech giant’s trading.
Aim-listed IQE, which supplies a key component in the iphone X’s face recognition software, tumbled 4.2p, or 3.7pc, to 108.8p, while Reading-based supplier Dialog
Semiconductor dropped as much as 6.1pc in Frankfurt.
Miner Petropavlovsk surged 1.1p to 8.2p after admitting that it has still not unveiled the identity of a mystery activist investor attempting to overthrow its board and reinstate the Russian firm’s former boss.
The miner said that a letter supposedly revealing the backer of CABS Platform and Slevin, the offshore investors holding a 9.1pc stake in the company, proved to be “yet another veil of secrecy”.
Pavel Maslovskiy, Petropavlovsk’s former chief and co-founder, has warned that the current board lacks the expertise to manage the
company and the secret shareholder wants Dr Maslovskiy and two other former directors put back in charge.
The company warned that the mystery investor “should raise several concerns for shareholders” ahead of its AGM later this month, but investors enticed by a potential shake-up boosted Petropavlovsk shares 15pc.
Primark owner Associated British Foods
nudged up 34p to £27.40 after Barclays endorsed its plan to conquer the US clothing market.
Lifting the price target by 70p to £34, the bank’s analysts told their clients that they had returned from a trip to the budget retailer’s American stores with “increased conviction that the concept is resonating well with the consumer”.
They added that Primark is well placed to build a clothing empire in the US market as big as Europe’s over the next five to 10 years.
A second broker upgrade in as many days boosted troubled outsourcer Capita to a four-month high.
RBC Capital Markets backed the company’s “credible” plan to kickstart a turnaround by raising £1bn from a rights issue and selling non-core parts of the business.
Although it “won’t be a straight-line recovery”, concerns over its debt have been “addressed” in the strategy shift, analyst Andrew Gibb argued, which lifted Capita by 6.4p to 156.4p.
Its peer Mitie slumped 15.5p to 179.7p after Numis raised concerns over its debt pile in a downgrade to “reduce”.
Investors turned cautious ahead of what was expected to be a thorny G7 summit in Canada, with the FTSE 100 sinking 23.33 points to 7,681.07, which dragged the stock index to its third weekly loss.