TMCnet News

Arm and Imagination down as technology shares hit by Nasdaq declines
[September 16, 2014]

Arm and Imagination down as technology shares hit by Nasdaq declines


(Guardian Web Via Acquire Media NewsEdge) Technology stocks have come under pressure following overnight weakness in the Nasdaq market.

The US high tech index had its worst day since July as investors pulled money out to help fund this week's market debut of Chinese ecommerce business Alibaba, which could be the largest IPO in history. There was also caution ahead of the US Federal Reserve meeting, which will be scoured for signs of the timing of any rise in interest rates.



So in the UK, chip designer Arm, which had been performing well in the run-up to last week's Apple iPhone 6 announcement, has dropped 17p to 921p. Meanwhile ahead of Wednesday's results, rival Imagination Technologies has fallen 11p to 185.7p. But analysts at Liberum repeated their buy recommendation on Imagination: [We] don't expect to change our adjusted earnings before interest and tax of £22m for 2015. Potential positives: licensing strength to continue, helpful currency move (dollar revenues, pound cost base), strong average royalty rate (less Mediatek more Apple and Intel). Potential negatives: trim 2015 royalty units (Broadcom exited smartphones, uncertainties over MediaTek share). Any sign that operating expenditure controls are being put in place would be very well received.

Elsewhere IQE is down 1.75p or nearly 9% to 18.25p after the company, which makes semiconductor materials, reported a first half loss of £2.3m compared to a £2.5m profit a year earlier. The plunge into the red came after a £3.1m charge for restructuring. Revenues fell 17% as customers destocked due to weakness in the handset market.


Finally Iomart has dropped 34.75p to 228p in the wake of news that Host Europe, controlled by venture capital group Cinven, did not intend to make a formal offer for the cloud computing company. A positive trading update has done little to limit the damage.

(c) 2014 Guardian Newspapers Limited.

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