SPECULATION on Apex Corporation Ltd’s performance based on above-market expectation earnings by sister company Phoenix Consolidated Ltd has made brokers scrounge for the grou
p’s shares, pushing the price to $400 yesterday morning.
Brokers said the scrip had become scarce as long-term investors held on to the stock for future consolidation.
Apex Holdings has a 51% stake in Phoenix Consolidated.
Considering Phoenix contributed close to 57% and 75% to Apex turnover and operating profit respectively in the year to October 31 2002, investment analysts have said Apex was set to surpass the range of forecasts of between $12 and $20 for the six months ended April 30.
“There have been so many keen buyers for Apex shares but unfortunately sellers have been holding on to the stock speculating the price might continue on an upward trend. The speculation has been boosted by the sister company’s above market expectation earnings per share performance,” said Norman Maferefa an investment analyst.
Phoenix earnings per share at $9,34 for the six months ended April 30 are likely to further help the Apex share to stabilise at around $400, Maferefa said.
But some analysts said the price increase was not likely to continue on the upward trend as the recent increase has already factored in the speculation surrounding the group’s performance.
Another investment analyst said: “It is unlikely that the share might record any significant gains going forward considering the speculation pushed the price from $270 to $400. The price increase shows that the stock has reached its top value and any further increase is not going to be significant.”
Philpott & Collins, often described as the group’s star performer and household name in stationery, was most likely to put up another splendid performance in the six months under review after consolidating its Olivetti franchise and the agreement with Foca, a South Korean manufacturer of generic computer cartridges. Zimcast, another Apex group’s operating company’s exports are expected to have grown substantially with South Africa, Botswana and Malawi being the major markets.
Supersonic, which performed to profitability in the last two months of the last financial year which ended October 31 2002, was likely to have built up the demand from last year after strengthening its links with Telefunken which the group said was proving beneficial.
Analysts said benefits for the Olivetti franchise, agreement with Foca and the Telefunken deals would be reflected in the current six months under review.