Before the bell: The Party Continues

Bank stocks shine in Europe, Japanese automakers post gains, and LVMH reports a drop in revenue.

Wall Street extended Friday’s rally yesterday. The S&P 500 closed 0.8% higher, and the Nasdaq added 0.6%. McDonald’s (+2%), Walmart (+2.1%), and Apple (+2.2%) outperformed the broader indices. Goldman Sachs (+1.9%) was rewarded for solid quarterly earnings. In Europe, the gains were even stronger. The Euro Stoxx 50 climbed 2.6%, with investors reacting to Wall Street’s strong Friday close. Banks shook off recession fears and rallied across the board: KBC (+2.9%), HSBC (+3.7%), Banco Santander (+3.8%), UniCredit (+4%), and BNP Paribas (+4.4%). The rise in BNP Paribas’ share price will likely be noticed in Belgian political circles, as the country still holds a 5.6% stake in the French bank. On May 13, shareholders will vote on a gross dividend of 4.79 euro, which represents a 7% yield based on the current share price of 68.50 euro. Belgium’s 63.22 million shares are now worth about 4.33 billion euro—making a (partial) sale an increasingly tempting option for the government.

In Japan, stocks rose by an average of 1.2% this morning. Hong Kong saw a smaller gain of just 0.2%. Mazda (+4.3%), Suzuki (+4.8%), and Toyota (+5%) stood out in Tokyo, while Alibaba (+1.2%) outperformed in Hong Kong. In the Netherlands, TomTom is reporting quarterly results. Belgian biotech company Galapagos shocked investors this morning with the announcement that both its CFO and COO are stepping down. Seasoned investors know the Galapagos stock has long been one to avoid. In Germany, we’re expecting results from the investor sentiment survey, while in the U.S., Bank of America, Citigroup, and Johnson & Johnson will report before the opening bell. In Amsterdam, Stellantis shareholders gather this afternoon for their annual meeting at 2:00 p.m.

Ageas Secures Funding

While singer Sam Gooris once praised laziness with his 1995 hit Laat het gras maar groeien (“Let the grass grow”), the folks at Ageas are anything but idle. And as shareholders, we’re pleased about that. The Belgian insurance group had already stated it would fund the esure acquisition with cash and a loan. On the same day the acquisition was announced, Ageas also raised capital through a private placement, securing 550 million euro. The issue price was set at 50.15 euro per share—a 5.4% discount to Monday’s closing price. Retail investors may be disappointed that they couldn’t buy in at that level, but Ageas acted correctly and respectfully. Organizing a capital increase for retail investors would have required a prospectus and a long subscription period, which would be risky in today’s volatile markets. This approach provides speed, certainty, and investor confidence. Compare that to the botched acquisition of ABN AMRO by Ageas’ predecessor, Fortis, in 2008—and the contrast couldn’t be greater.

No Luxury Here

LVMH reported first-quarter revenue of 20.3 billion euro, down from 20.7 billion euro a year ago. A 9% drop in champagne and spirits sales was expected. More concerning is the 5% revenue drop in the fashion and leather goods division—eight times larger than the drinks division. Perfumes, cosmetics, jewelry, and watches matched last year’s figures. Management noted “strong resilience” in fashion and leather sales, but offered little in terms of outlook: “In a disrupted geopolitical and economic environment, LVMH remains vigilant and confident going into the year,” the press release said. That’s all for now. But we certainly don’t doubt CEO Bernard Arnault’s abilities—he didn’t build his 163 billion dollar fortune by accident.

Did you know…

that Gaëtan Hannecart, chairman of Tubize, bought 4,659 shares of the holding company above UCB last Friday? Back in February, a share cost 154 euro, but Hannecart managed to scoop them up for 107.33 euro. Yesterday, the share was already back at 111 euro.

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