Before the bell: quiet toward the holidays

In Spain, we bid farewell to Corporación Financiera Alba; in Germany, Porsche SE writes down its positions. Meanwhile, there’s a birthday celebration in France.

With the holidays approaching, investors are experiencing calmer times. Last week, the average European stock declined by 0.5%. However, Belgium’s Bel20 index managed a 0.3% gain, with KBC Group climbing 4% over the week. Barclays raised its price target for the bank-insurer to 87 euros per share, still 19% above Friday’s closing price. Across the Atlantic, the S&P 500 fell 0.6% for the week, while the Nasdaq gained 0.3%, buoyed by Broadcom. The stock soared over 24% on Friday following better-than-expected results driven by AI. While a year-end rally has yet to materialize, investors have little reason to complain as 2024 has been a lucrative year.

In Asia, the week begins on a negative note. This morning, Japan’s Topix fell 0.3%, while Hong Kong’s Hang Seng Index dropped 1%. In Belgium, the National Bank will release its economic outlook today. In the U.S., after-hours earnings from ready-meal producer Mama’s Creations are expected. On Wednesday, the Federal Reserve is set to make a rate decision, with similar announcements expected this week in the U.K. and Japan.

Adiós

Some companies trade below book value for years, leaving shareholders feeling stuck. But occasionally, the end of the road comes suddenly. This happened last Friday with Corporación Financiera Alba. The Spanish holding company, which had been trading at a roughly 50% discount, announced plans to delist. The March family, the majority shareholder, offered 84.20 euros per share, representing a 79.5% premium, sending the stock price soaring by 74%. The holding’s portfolio includes firms such as Naturgy Energy Group (gas and electricity distribution), Viscofan (food industry casings), and Ebro Foods, the world’s largest rice producer. If the deal proceeds, the March family will acquire the portfolio at a still-discounted 15% rate—a classic win-win situation.

Auf Wiedersehen

In Germany, Porsche SE is taking a different path. The holding company behind Volkswagen plans to write down up to 40% of its stake in the carbuilder, amounting to between 7 and 20 billion euros. Every year, Porsche SE adjusts Volkswagen’s valuation on its balance sheet. Usually, this is a non-event, but this year, insufficient data forces the holding to rely on analysts’ projections, which are grim. Volkswagen is currently negotiating with unions for the fifth time over factory closures and job cuts deemed necessary amid declining sales. Porsche SE stated that the book value of its Volkswagen position remains higher than the automaker’s market value.

Did you know…

Christian Dior turns 78 today? The fashion house was founded on December 16, 1946, in Paris by its namesake designer. In 1984, Bernard Arnault took the reins.

This article was translated from Dutch and was originally published on Spaarvarkens.be.