MARKET REPORT: Semiconductor maker IQE loses a quarter of its value

MARKET REPORT: Semiconductor maker IQE loses about a quarter of its value as it admits global chip shortage has weighed on profits

IQE lost about a quarter of its value after it shocked the market with harsh forecasts.

The semiconductor wafer maker said it was hit from all sides by a global chip shortage, declining demand for new mobile phones, currency movements and the slow, stop-start rollout of 5G infrastructure.

Earnings will fall 40 percent this year to around £18 million and sales fall 15 percent this year to £152 million, IQE said in a trading update.

Earnings Alert: IQE said it was hit by a global chip shortage, falling demand for new mobile phones, currency movements and the slow, stop-start rollout of 5G

IQE doesn’t make chips. Instead, the AIM-listed group creates the wafers that are then used as the basis for the semiconductors essential for products such as phones — including Apple iPhones — and cellular network infrastructure.

IQE’s warning comes as smartphone makers and companies in a range of other industries are placing fewer orders for high-tech kits as they grapple with a shipping and freight crisis.

Russ Mold, investment director at AJ Bell, said: “The current moves have something to do with the weak numbers.

Inventory Monitoring – MyHealthChecked

Investors piled on MyHealthChecked when it launched two Covid home testing services for travelers.

The Cardiff-based company has rolled out a rapid antigen test and verification service for people receiving a double shot coming to England from a country not on the red list.

This will be followed next week by a Fit to Fly rapid test for those leaving the UK.

The tests can be arranged online. NHS professionals will verify the results of the swabs, the AIM-listed group said.

Shares in MyHealthChecked rose 13.17 percent, or 0.27p, to 2.32p. The stock is up about a fifth so far this year.

But the real blows are lower-than-expected global sales of 5G mobile telecom infrastructure and emerging signs of declining demand in the smartphone market, which may be related to supply chain disruptions and chip shortages elsewhere.”

Shares in the Cardiff-based group fell 24.4 percent, or 12.3p, to 38.1p.

Another company that suffered heavy losses was Genus, which plunged to the bottom of the FTSE 250 standings after it also issued a profit warning.

The farmer warned that an unstable pig market in China would cause annual incomes to be ‘moderate’ lower than previously forecast. Genus breeds animals after analyzing their DNA to create the hardiest herds. It supplies pig and cow breeding stock to China.

The country’s hog market has seen rises and falls in Genus’ results in recent years, after outbreaks of African swine fever led to millions being culled in 2019. The stock closed 10 percent lower, down from 524p to 4726p.

At the other end of the scale, Intertek shares rose after it told investors its earnings were up in the four months to October — albeit modestly, by 2.2 percent.

Intertek is one of the lesser-known companies of the FTSE 100. It tests, inspects and certifies goods in industries from chemical and food to transportation and construction.

The group says companies are now investing more in quality assurance. The stock rose 6 percent, or 310p, to 5470p.

Intertek helped keep the FTSE 100 in the black, with the blue-chip index closing 0.27 percent higher, up 19.63 points, to 7286.32.

The FTSE 250, on the other hand, fell 0.23%, or 54.55 points, to 23167.06.

European markets were rocked by new Covid outbreaks that are accelerating on the continent.

France’s Cac was marginally in the red, while Germany’s Dax fell 0.4 percent as the World Health Organization said there could be another 700,000 deaths in the region.

In the early trades, uncertainty over winter holidays to the continent led to a decline in airline shares, but companies like Easyjet (+0.3 percent or 1.6 pence to 557 pence), British Airways owner IAG (0.3%) 9 percent or 1.3 pence) p, to 152.8 p) and Wizz Air (up 1.2 percent, or 52 p, to 4352 p) were up towards the end of the day.

Elsewhere, the AIM-listed vet group CVS said it continued to benefit from pet confinement.

The company has started the fiscal year well – with sales up 14 percent in the first four months. It has over 500 veterinary practices in the UK, Ireland and the Netherlands.

But the huge sales figures were dampened by staffing challenges. The number of veterinarian vacancies is now at 9.2 percent, up slightly from 8.8 percent.

These staff shortages may have dragged CVS stocks 1.9 percent, down from 45p to 2380p.