Business
Investors Roll The Dice As Apple’s Value Booms
The world’s most valuable company has turned into a bit of a casino stock.
Since Apple Inc on February 29 became only the sixth company in U.S. history to top $500 billion in market capitalisation, trading has become more volatile, indicating that more investors are tracking headlines and looking for quick gains.
Apple has gained 32 percent since the beginning of the year, outstripping its gains for all of 2011. It accounts for more than 4 percent of the weight of the S&P 500 index, a kind of outsized standing that has caused its moves to dictate market direction on a daily basis.
That’s a trend that is causing consternation among some players in the market. They note that other companies that had become members of the elite $500 billion club not only couldn’t sustain their standing, but weighed on the entire market as they fell, Reuters report.
For long-term investors, the stock of the iPad and iPod maker has been a winner, the ultimate in buying and holding. From a short-term basis, buyers have gotten much more fickle.
“Apple has become a favorite daytime trading stock for short-term traders. It’s one of the rare stocks that have momentum followers and that move on headlines that are not related to earnings,” said David Rolfe, chief investment officer at Wedgewood Partners in St. Louis, Missouri. The firm manages $1.5 billion in assets and owns Apple shares.
Intraday swings in Apple are at the most volatile levels since October last year. The swings have averaged around $12 a day for the past two weeks, compared with about $14 in October.
On Monday, Apple shares plunged 3.1 percent in about 10 minutes around 11 a.m., which pushed the company’s market cap below that $500 billion threshold. Trading volume spiked during the drop to almost 3.8 million shares, the heaviest 10 minutes of turnover since February 15, when the stock’s shift in direction pulled the market with it.
Apple shares typically run up in the days ahead of a major product launch, but the shares have gained sharply this year, in part on anticipation over a new generation of its popular iPad tablet.
The new iPad 3 – which is expected to offer a better screen, camera, processor and 4G wireless capabilities for the same price – is to be unveiled on Wednesday. Any major disappointment may weigh on the shares.
For Apple, a share price of $537.54 marks the level that pushes it above a market cap of $500 billion.
There are concerns that Apple, because of its size, will start to hurt the overall market should the euphoric trading that pushed it to a record high of $548.21 on March 1 subside.
“We used to say ‘if GE goes, then the whole country goes.’ Now we say ‘if Apple goes, the whole country goes,’” Rolfe said.
Apple joins only a handful of companies – Microsoft, Exxon Mobil Corp, Cisco, Intel and General Electric – that have crossed the $500 billion mark. None of those other stocks was able to sustain that value.
“How the others – and equities in general – performed after hitting that threshold wasn’t good,” Jason Goepfert, president of SentimenTrader.com, said in a report last week.
As Apple shares dipped on Monday, activity in the options market picked up, ranging from investors hedging their long positions in the stock to betting on a rebound.
“Short-term implied volatility for weekly options that expire this Friday jumped more than 10 percent as nervous investors bought options to hedge positions,” said Tim Biggam, options strategist at options trading firm TradingBlock in Chicago. Implied volatility measures the expected magnitude of share price movement conveyed by option prices.
“There was a mad rush for out-of-the money puts mostly congregated in the $520 to $530 range expiring this Friday and on March 16 for standard one-month options,” he said.
Despite the high price, Apple look like a value stock. It trades at 15 times earnings, close to the 14 earnings multiple of the broad S&P 500 index, even though its earnings per share grew nearly 83 percent last year, nearly four times that of the broad index.
In February, Apple shares have moved than 1 percent up or down on a single day in 12 sessions.
Stakeholders are expected to converge in Lagos today to take a look at the Nigeria’s preparedness to maximize the gains of the African Continental Free Trade Area (AfCFTA).
The Tide learnt that stakeholders will be converging at the instance of a popular online newspaper, Primetime Reporters, to assess the progress made so far by the Federal Government through the National Action Committee on AfCFTA agreement.
The event which is the Third Annual Lecture and Awards of the online medium has as its theme: “Assessing Nigeria’s Preparedness to Maximize the Gains of AfCFTA.”
The event will also witness conferment of awards on eight eminent Nigerians who have distinguished themselves in various fields of human endeavours.
The Managing Director/Editor-In-Chief of Primetime Reporters, Mr. Saint Augustine Nwadinamuo, made this known in a statement made available to The Tide in Lagos on Monday.
According to him, the event will hold at the National Institute of International Affairs (NIIA), Kofo Abayomi Street, Victoria Island, Lagos beginning from 10.00am.
Nwadinamuo said that the event would be chaired by a renowned legal practitioner, Barr. Osuala Emmanuel Nwagbara of the Maritime and Commercial Law Partners, Lagos, while the Director General, Lagos Chambers of Commerce and Industry (LCCI), Dr. Muda Yusuf, would be the lead paper presenter.
By: Nkpemenyie Mcdominic, Lagos
The Economic and Financial Crimes Commission (EFCC), has arrested a leader of a deadly 419 syndicate, Abayomi Kamaldeen Alaka (a.k.a Awise) over an alleged attempt to swindle an innocent Nigerian of N250 million.
The Tide learnt that the syndicate operates from a shrine at Ashipa Town, near Abeokuta, Ogun State.
According to a statement made available to The Tide in Lagos on Sunday, by the EFCC, Awise’s arrest followed a petition by his victim, Juliet Bright who lost N250m to the fraudster after she was tricked to provide money for sacrifices and invocations to heal her of an ailment.
The statement said Bright was introduced to Alaka by one Akinola Bukola Augustina (a.ka. Iya Osun) whom she met on Facebook in the course of her search for solutions to her health challenge.
What drew her to Augustina was the latter’s post under the name, Osunbukola Olamitutu Spriritual Healing Centre.
Once Bright contacted Augustina, the latter promised to heal her if she could pay N16 million.
The victim paid the money through an Access Bank account belonging to one Mohammed Sani, who later turned out to be a Bureau De Change Operator.
After paying the money without receiving healing, Augustina transferred the victim to other members of the syndicate, notably Awise.
Bright revealed that she met Awise at his shrine in Ashipa Town and was hypnotized and subsequently transferred various sum through bank accounts and in cash to the suspect and his syndicate members, until she lost N250 million to them.
Despite all the monies collected from her, her health conditions has never improved.
By: Nkpemenyie Mcdominic, Lagos
An expert in Quarantine Agriculture, Dr Vincent Ozuru, has advised Nigerian farmers to give more attention to growing plants produce that could be exported.
He said that plant like the hibiscus, popularly known as Zobo is on high demand in some countries around the world, today.
Ozuru who gave the advice while speaking to aviation correspondents at Port Harcourt International Airport, Omagwa, noted that some plants produce, particularly hibiscus, had yielded huge revenue to the Federal Government through export.
According to him, Nigeria exported about 1,983 containers of hibiscus to Mexico alone in 2017 and earned $35 million within nine months of that year.
The agricultural quarantine expert explained that the export of the plant had a setback as a result of storage pest discovered by the Nigeria Agricultural Quarantine Service in some consignments.
“The issue has now been taken care of and the export is resuming again, and all matters have been resolved with the stakeholders across the value chain.
“Mexico is the largest importer of Nigerian hibiscus, and our farmers should brace up to the challenge.
“The good news is that Nigeria has a vast growing belt in hibiscus, and the harvest is available all year round.
“We need to take advantage of this opportunity to earn foreign exchange for ourselves and for the country at large, even with the commitment of the present administration to diversify the economy”, he said.
Ozuru called on Nigerian farmers to show more commitment to the growing of export produce and also endeavor to get ready information on it in order to increase their income.
By: Corlins Walter
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