IQE Short Circuited by Trade Tensions


Friday, June 21: The FTSE 100(-0.23%) was lifted by rallying oil majors as crude prices rose on the back of rising Middle Eastern tensions at the open, though gains were pared into the close as sterling strengthened against both the euro & the US dollar.

Heavyweights Shell(+0.83%) & BP(+1.26%) were higher after a report announced US President Donald Trump had approved military strikes against Iran, before abandoning plans to launch the attacks. Miners also gained on the primary index, as copper prices extended gains on the back of signals that the US Fed could be ready to cut rates as early as next month.

Semiconductor manufacturer IQE slumped 25.26% as it announced both revenue and adjusted operating profit were expected to nose dive on the back of order delays due to the US ban on Huawei products. A larger hit to operations is now anticipated than that related specifically to Huawei, due to the unanticipated knock-on effects on other companies and supply chains. For the full year, IQE expects to generate revenue of between £140m and £160m, missing consensus forecasts of £175m. IQE’s adjusted operating profit margin is expected significantly below previous guidance of more than 10%.

European equities were lower at the close, with the FTSE 100 -0.23%, the CAC 40 -0.13% and the DAX 30 -0.13%.


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