Market Report: ARM leaps as royalty boost signals iPhones are shrugging off China woe

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Never mind the so-called “Great Fall of China”, the royalties are rolling in for iPhone chipmaker Arm Holdings.

The Apple supplier’s third-quarter results revealed a 24% rise in revenues to £243.1 million, with pre-tax profits up 27% to £128.4 million.

But it is the royalties that are reassuring investors, up 37% from last year.

The shares leapt 78p, or 8.1%, to 1040p, racking up their biggest one-day rise in two and a half years.

Augustin Eden at Accendo Markets said Arm’s rise in profits and royalties saw “traders and investors alike breathing a cash-tinged sigh of relief”.

The City has been concerned that China’s slowing growth would have a knock-on effect on smartphone sales, especially since it overtook the US  this year as the world’s biggest smartphone market.

These fears have hit Arm and Apple’s shares this year. But Arm has recovered some of the ground lost as it continues to report robust trading.

The FTSE 100’s losing streak continued as it drifted 13.74 points lower to 6331.39, with tentative trading ahead of tomorrow’s European Central Bank meeting to decide whether or not to extend its bond-buying programme.

Investors snapped up shares in FTSE 250 trading software group Fidessa, which gained 57p to 1917p, on the prospect of another special divi.

Shares in Sportingbet owner GVC raced 18.5p higher to 389.8p after Panmure Gordon said shareholders could double their money in just four years thanks to the Bwin.Party deal.

Analyst Karl Burns told clients: “Whilst initially sceptical about the acquisition, further analysis has shown the stock holds limited downside risk.”

There was a rare rise from payments minnow Monitise, up 0.06p or 2% to 3.04p. The former Aim fintech darling, down almost 90% this year, renewed its deal with Spanish mobile giant Telefonica as it shifts its business to the cloud.

Evgen Pharma was trading up at 40.4p on its Aim debut after floating at 37p a share. The company, whose flagship product Sulforadex is a synthetic version of sulforaphane, an anti-cancer agent found in broccoli, had mapped out a float last year to raise £20 million, but rocky market conditions forced it to put listing plans on ice.

Punters had a thirst for Kent-based wine and beer maker Chapel Down, whose shares on the minor ISDX market rose 0.5p to 28p as it unveiled plans to raise £1 million through equity crowdfunding for its craft beers.

The cash will go towards building a new brewery in Ashford.

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October 21, 2015 |
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