Before the bell: Japanese market starts the week with strong gains

Bel20 heading for 5,000 points, UCB and Tubize soar, BlackRock turns to blockchain, and Recticel heads to the U.S.

Many stock indices surged to new highs last week. Investors have long grumbled about the Bel20, but last week Belgium’s benchmark index jumped 5.6% to 4,930.43 points. After its best week in two years, the Bel20 now needs just another 1.5% to cross the 5,000-point mark. With a spectacular rise of 30.9%, UCB was the main engine driving the rally. Final test results for a potential rival to its drug Bimzelx showed that UCB has nothing to fear. Some investors may be surprised, but loyal readers of Saxo’s Beurswekker newsletter already knew that UCB’s Bimzelx is the best drug in its class. The stock has now gained 222% in just two years. Its parent holding Financière de Tubize can still be bought at a 45% discount to its net asset value — though a 30% discount seems more reasonable. Last week, Tubize trimmed that gap with a massive 41.2% jump. Ironically, just as Belgian equities begin to outperform, the French bank BPCE, owner of Bank Nagelmackers, has decided to shut down its Belgian wealth management operations. That could soon create some selling pressure on Belgian small caps held by its funds.

This morning, fireworks in Tokyo: the Topix jumps 3%, while the Nikkei soars 4.6%. Investors are reacting to the election of Sanae Takaichi, the former Minister of Economic Security, as leader of Japan’s ruling party. She is now expected to become Japan’s first female prime minister — and is considered one of the party’s most conservative members, which is largely male-dominated. In Hong Kong (-0.7%), investors are taking profits after last week’s 3.9% gain. The Hang Seng Index remains this year’s best-performing major index, up 35.3% since January. Earnings season will truly kick off next week with results from U.S. banks. Today, ExxonMobil and Constellation Brands are on deck. In Europe, ECB President Christine Lagarde will speak, and we’ll get retail sales data for the EU.

ETFs on the blockchain soon?

With 12.5 trillion dollar in assets under management, BlackRock is the largest asset manager in the world. A quarter ago, investors sent the stock 6% lower even as the group hit that record, mainly due to growth through acquisitions. On Friday, Reuters reported that BlackRock will acquire Aligned Data Centers for 40 billion dollar — another move to secure AI data infrastructure. According to Bloomberg, BlackRock is also preparing to trade ETFs as tokens — not on traditional exchanges, but on the blockchain. Founder and CEO Larry Fink says this could make ETF trading even cheaper. With its iShares brand, BlackRock is already the market leader in ETFs across Europe.

Patience is a virtue

Investors remain cautious about insulation manufacturer Recticel. The stock has fallen 17% since the start of the year, despite relatively solid half-year results. While Europe’s construction sector continues to struggle, Recticel managed to grow revenue by more than 10% in the first half — though margins narrowed, causing profit to slip. Shareholders were also disappointed by a write-off on a loan to the now-sold automotive interiors division. In an interview with De Tijd, CEO Jan Vergote urged patience, promising that Recticel will grow in both revenue and profit, even without a cyclical recovery. A new U.S. plant for sandwich insulation panels — a higher-margin product than standard panels — should help. The American production line, however, will only start operating next year. Analysts expect profit to fall 50% this year, but double again in 2026.

Did you know…

that Bank Nagelmackers, founded in Liège and boasting 275 years of history, is Belgium’s oldest bank. It operated for many years under the name Delta Lloyd Bank and, until the recent takeover, was owned by a Chinese group.

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