Before the Bell: The Star Shines in Brussels

UCB and Tubize surge in tandem, while Carnival gets no reward despite strong results.

Indeed, the performance of a single stock can sometimes move an entire index. It’s rare, but yesterday Brussels proved the exception. While European markets managed only a meagre +0.1%, the Bel20 sparkled with a gain of +2.2%. That was thanks to UCB, which at one point was up 20% before closing with a +15.6% gain. Its holding company Financière de Tubize jumped +19.5%. Long-time followers of the Belgian pharma group know that its new star drug Bimzelx is already conquering the market, but the collapse of potential rival MoonLake Immunotherapeutics (-90%) further improves the outlook. Elsewhere, there was little excitement, though the S&P 500 (+0.3%) and especially the Nasdaq (+0.5%) still delivered solid daily gains. Nvidia (+2.1%) performed well, and Electronic Arts (+4.5%) got the takeover bid everyone was expecting.

In Tokyo, the Topix gained 0.4%, while Hong Kong’s benchmark ended flat, though Alibaba (+1.6%) edged higher. After yesterday’s Belgian inflation print (+2.12%), it’s Germany’s turn today to report how much more expensive life has become. Earnings are also due from Floridienne and Oxurion, with Nike reporting after the bell on Wall Street.

People still have money left for a cruise

Carnival Corp posted strong quarterly results before the market opened yesterday. Revenue rose 3.2% to 8.2 billion dollars, driven by ticket sales (+3.6%) and onboard spending (+2.5%). By keeping a tight grip on costs (passengers keep an eye on their kids, the company on expenses), net profit climbed 6.5% to 1.9 billion dollars, the highest in the company’s history. Both figures beat expectations. At the open the stock jumped 6.1%, only to slide down the waterslide and close 4% lower at 29.40 dollars. Even management’s third guidance upgrade this year couldn’t prevent the drop. Carnival has recovered from its 9-dollar low in summer 2022, but remains far from its 2018 record above 71 dollars. I don’t invest in tourism or shipping stocks on principle, but otherwise this one would be tempting.

First Brands runs on empty

During recent meetings with insurers, I learned that AG’s car insurance even covers breakdowns when a distracted driver forgets to recharge their EV. Nice! If only markets offered that kind of coverage. Unfortunately, no one is willing to insure—or refill—the empty fuel tank at First Brands. The U.S. company, active worldwide in auto parts, owns a broad portfolio of brands. But it was also saddled with heavy debt in all shapes and sizes. Factoring was especially popular: invoices issued but not yet paid were sold to financiers, who did not necessarily guarantee collection. With too many customers failing to pay, First Brands has now had to file for bankruptcy itself. A lesson: be careful with debt. Don’t borrow too much yourself, and don’t lend to someone who may end up running on empty. Today’s De Tijd features yet another full-page ad claiming it does everything for advertisers. At Spaarvarkens, we focus on our members. As it should be.

Did you know…

that Carnival Corp scrapped its traditional cash dividend for the coming years, but still pays a dividend in kind? Shareholders with at least 100 shares receive an “onboard credit” of 40 to 200 euros, depending on the length of their cruise.

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