Before the bell: Valentine’s Day Brings Positivity

Green lights across the markets as stock indices surge. ARM plans to manufacture its own chips.

The Euro Stoxx 50 jumped 1.7% yesterday, with Adyen leading the charge, soaring 14.4% after reporting strong earnings. The Dutch payments company also expects higher growth in the coming period. In Brussels, the Bel20 (+1.2%) broke an 18-year record, surpassing 4,433 points for the first time since before the 2007 financial crisis. KBC stood out, gaining 4.3%. Meanwhile, in Switzerland, Nestlé attracted attention as soaring chocolate and coffee prices put pressure on the food giant. Still, its stock climbed 6.2% as investors welcomed CEO Laurent Freixe’s turnaround plan: deep cost-cutting combined with increased investment in advertising and marketing to get the company back on track. U.S. investors were also in high spirits, with the S&P 500 and Nasdaq rising 1% and 1.5%, respectively. MGM Resorts hit the jackpot, surging 17.5% after reporting a 7% increase in annual revenue. Rival Caesars Entertainment (+9.2%) also rode the wave of market enthusiasm.

This morning in Asia, the Hang Seng Index (+2.5%) in Hong Kong posted another strong session. In Tokyo, the Topix slipped 0.3%. In Belgium, Umicore released its earnings, reporting 2024 revenue of 3.5 billion euros—a 10% decline from 2023 and below expectations. The company posted a profit of 1.06 euros per share, with a proposed dividend of 0.5 euros per share (down from 0.8 euros last year). Econocom also reduced its dividend to 0.10 euros per share from 0.16 euros, while Nextensa scrapped its dividend entirely. In France, aircraft engine maker Safran and luxury goods company Hermès are set to report their earnings. Across the Atlantic, vaccine maker Moderna, Air Canada, and energy infrastructure giant Enbridge are among today’s key earnings releases.

Change of Plans

British semiconductor firm ARM Holdings is making a major strategic shift. The company has decided to start manufacturing its own chips, directly competing with its customers—some of the biggest names in the industry. ARM currently supplies modular chip architecture to companies like Nvidia and Apple, providing the building blocks for their custom chip designs. CEO Rene Haas is set to unveil the company’s first in-house chip this summer, with Meta reportedly already lined up as a buyer. By entering chip production, ARM will gain direct exposure to the semiconductor market, which is estimated to be worth 700 billion dollars.

Value Creation for Buyer and Seller

Belgian real estate developer and landlord Nextensa has sold its shopping centers in Luxembourg to Wereldhave Belgium (WB) and its Dutch parent company Wereldhave NV. The deal involves two shopping centers with potential for further development. WB is paying 103 million euros, generating an initial yield of 7.2%—higher than its current portfolio. As a result, WB has immediately raised its profit forecast for 2025 by 38 eurocents to a range of 5.35 to 5.45 euros per share. WB’s profitability had been held back by strict regulations requiring a low debt ratio due to a large Liège site accounting for over 20% of its portfolio. With this acquisition, that limitation is lifted, potentially marking the start of a new growth phase for WB. A positive market reaction is expected. Meanwhile, Nextensa has been gradually retreating from retail real estate and will use the proceeds to reduce its high debt ratio. The company is also focused on its major project in Brussels, where it is acquiring the Proximus towers and relocating the telecom giant to its own Tour & Taxis site.

Did You Know …

that a dozen eggs in the U.S. now costs over 8 dollars—the highest price ever and double what it was a year ago? The surge is due to the bird flu outbreak, which has forced farmers to cull their flocks. In Europe, a dozen eggs still cost around 3 euros.

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