Before the bell: nice gains on Friday the thirteenth

This week will be looking forward to the U.S. central bank’s interest rate decision. In Brussels, it could be the week of the sexiest monoholding.

On Friday, Wall Street closed an excellent stock market week with gains. The S&P 500 was able to move 0.5% higher and the Nasdaq 0.7%. Thus, both indices posted weekly gains of 4% and 6%, respectively. In Brussels, the Bel20 posted “only” a gain of 1.8% last week. This is admittedly a lot less than its American counterparts, but the Brussels stock market did record more gains than Wall Street in recent months. Friday the 13th seemed like the day when ugly ducklings in Brussels turned back (briefly) into beautiful swans. Umicore posted a one-day gain of 6.6%. D’Ieteren, which fell sharply earlier in the week due to a lack of respect for small shareholders, recovered 3%. Ekopak, which has been facing sellers for some time, gained 8.6% on Friday. We are curious to see if that recovery is sustainable.

There is not much trading on Asian stock markets this morning. Tokyo has a day off (Old Age Day) and the Chinese mainland is not working either (Mid-Autumn Festival). The Hong Kong stock market does not celebrate mid-autumn until Wednesday, but is unchanged this morning. Later, after hours, Belgian coffee machine and water cooler supplier Fountain will publish its figures. Those don’t interest us. The company is an eternal disappointment. Much more interesting will be the interest rate decision of the U.S. central bank. But we will have to wait for that until Wednesday evening.

Strike and Nike

Nike shares could still rise 0.8% on Friday. But this weekend, it was announced that the sportswear manufacturer may have to pay a fine of 1.5 billion euros to the Belgian tax and customs authorities because the company had allegedly paid too little import duties and VAT. Wonder how investors will soon react to that setback. It may not be a good day for Boeing shareholders either. The aircraft manufacturer’s shares have already fallen 40% this year. The company has an immense image problem and pays hefty compensation for late deliveries. On top of that now comes a major strike. We understand the strikers. Boeing has been making losses for years, yet the ceo got a 45% pay raise to $33 million last year? You don’t. On Friday, shares of the low-flyer were already down 3.7%. 

Sleeping Beauty Awakens

This week could well be Tubize’s week. We have long been fans of this Belgian monoholding over UCB for two reasons. First, we believe in UCB’s enormous potential. Its psoriasis drug Bimzelx could become UCB’s most successful product ever, with annual peak sales of perhaps four, five, or even 6 billion euros. Another reason we stick with Tubize is the huge discount at which to get into UCB. The holding company owns 36.24% of UCB and the debt is barely 31 million euros. As a result, Tubize is now worth 11.5 billion euros intrinsically, or 257 euros per share. But on the stock market, the holding is valued at barely 5.9 billion euros, or 132 euros per share. This discount of almost 50% is too great. A discount of 35% seems correct to us. Then the share would be worth 167 euros. On Monday, Tubize enters the Stoxx 600 and a lot of (index) funds will therefore still have to buy the Belgian holding. That promises!

Did you know that…

yesterday was the 16th anniversary of the bankruptcy of Lehman Brothers? The bankruptcy of that American merchant bank led to the second-largest financial crisis ever. The greatest crisis began in October 1929 with the Wall Street crash.