Apple has reached a new milestone by overtaking the overall market value of the entire FTSE 100 index of the UK’s largest listed companies.
The iPhone and iMac maker has had a fantastic performance this year, with the share price rising by an astonishing 75%, and last month it became the first US company to reach a market value of $ 2tn (£ 1.48tn). Since then, it has climbed even further, reaching a new record of $ 2,268 tn (£ 1
In contrast, London’s blue-chip companies, from Shell to HSBC, have lost almost a quarter of their total value since the beginning of the year. On Tuesday, the FTSE 100 was down 1.7% to 5862, the lowest level since mid-May. In total, the index is valued at £ 1.5tn.
The losses on Tuesday were partly due to a stronger pound, reaching 18% since the March low, hurting the earnings of the exporters who dominate the FTSE 100. Analysts also pointed to an element of recovery since the London market was closed on Monday when European peers experienced losses.
But the index has also missed the technology boom seen in the United States and elsewhere during the coronavirus pandemic.
Technology and e-commerce companies, from Apple and Amazon to online retailers, have benefited from consumers turning to digital entertainment and shopping services while stuck at home while locked up. The FTSE 100 is light on technology businesses and heavily populated by companies hard hit by the pandemic in sectors including real estate, aviation, hospitality and bricks and mortar.
Neil Wilson, chief market analyst at Markets.com, said: “The FTSE 100 is a dinosaur, full of rather cumbersome old stocks with precious little growth to offer. The FTSE 100 is a very good proxy for the global economy, which we know is on its knees. And if they are not exposed to the global economy (non-sterling wage earners), then they are fully exposed to the British economy (eg Lloyds, RBS), which makes it worse than peers, we think. “
Apple pushed past the value of the FTSE 100 after completing a 4-for-1 stock split on Friday, which means more stocks in the market but also makes them “more accessible to a wider base of investors”, as the company put it. A stock costs $ 130 compared to around $ 500 last week.
Apple, co-founder of selling personal computers by the late Steve Jobs in 1976, became the first U.S. company to be valued at $ 1,000 by Wall Street in 2018, 117 years after US Steel became the first to reach $ 1 billion.
After hitting tough times in the 1990s, Apple has stayed at the forefront of technology and media innovation and launched a number of hit products. Over the next few weeks, Apple will launch the iPhone 12.
Tim Cook, who took over as CEO when Jobs retired in 2011 due to deteriorating health, has led a nearly nine-fold increase in Apple’s stock price. Last year, the 59-year-old Apple boss became a billionaire.
Apple’s pressure on portable products, such as the Apple Watch and AirPod wireless headphones, and services, including Apple Music, has paid off, earning more than $ 13 billion in the last quarter alone. An estimated 550 million consumers regularly pay for an Apple service, while more than 1 billion own an iPhone or iPad.
Apple is involved in a lawsuit with Epic Games, the maker of the hugely popular Fortnite game, after it was removed from its app stores for violating Apple’s strict payment policies.