Before the bell: Europe smiles Greenland-wide

In Brussels, the focus today is on the possible IPO of Belron. Europe is heading for a red opening after new trade tariffs announced by President Trump.

Investor attention last week was fully focused on the United States. Chip companies such as Micron (+7.7%) benefited from additional investments announced by chipmaker TSMC (+1.1%). By contrast, gambling stocks such as DraftKings (-8%) and Flutter Entertainment (-6.3%) lost ground on Wall Street. Prediction markets such as Polymarket are gaining popularity in sports betting. In Asia, the sharp rise in Japan’s 30-year government bond yield stood out, climbing 10 basis points to 3.58%. Japan’s ten-year yield even reached its highest level since 1999. Today, the Japanese prime minister is expected to outline her plans for Japan.

Investor focus will now shift primarily to Europe. Over the weekend, the United States announced that countries such as Germany, France, the United Kingdom and five other European nations will face an additional 10% trade tariff as of 1 February. The tariff will only be lifted once a solution is found regarding Greenland. President Macron called for restricting US access to the European market and for tougher action against tech giants. Futures for European equities point to a decline of between 1% and 1.5% at the open, while the gold price is up 1.5% at a new record. In Belgium, attention will be on holding company D’Ieteren. According to the Financial Times, the group is working on an IPO of its subsidiary Belron, with a valuation said to be around 24 billion euro. Ageas announced this morning a one-off accounting gain in China, which will push operating profit for 2025 to between 1.6 and 1.65 billion euro. Agfa-Gevaert has received an independent expert ruling in its dispute with Aurelius over the sale of Offset Solutions. Agfa-Gevaert had claimed 19.1 million euro that Aurelius refused to pay, but the German investment group must now pay 14.7 million euro of that amount, according to the expert. Today, the US corporate calendar is empty as Wall Street is closed for Martin Luther King Day.

Buying second-hand is often cheaper

A golden rule I personally apply to Belgian IPOs and spin-offs is not to invest in companies that have just gone public during their first two years. The reason is simple: these companies can often be picked up much more cheaply later, once the IPO hype has faded. Sellers only sell when conditions are favourable to them, meaning at a valuation that suits the seller but is expensive for the buyer. Anyone who invested in recent IPOs such as Unifiedpost, Ekopak and Biotalys is now down 83%, 62% and 51% respectively. That is why I will not be a buyer of Belron if D’Ieteren brings the company to the stock market, as reported by the Financial Times. Belron is a high-quality business, but the suggested valuation of 24 billion euro is substantial, especially compared with expected free cash flow of just over 700 million euro. Let Carlos Brito take Belron public. A few quarters later, we can see whether the same shares can be bought second-hand at a lower price.

Canada embraces China

One prediction we have for 2026 is that China will increasingly fill the economic gap created by US trade tariffs. Over the weekend, it emerged that Canada and China have struck an important trade deal. Chinese EV manufacturers with an export focus, such as BYD and Geely, will once again gain access to the Canadian market at a tariff of 6.1%, down from the previous 100%. With an annual quota of around 49,000 EVs, rising towards 70,000, the volumes are not huge, but the signal is significant. Canada is explicitly positioning itself as a hub for electric vehicles and is aiming for Chinese joint ventures. This should lead to Canadian car and battery factories and create jobs to build out the domestic EV value chain. Canada’s mining sector and processors of critical metals such as nickel, lithium and graphite will also benefit. Uncle Sam stood by and watched.

Did you know…

that weight-loss drugs such as Ozempic could potentially save US airlines up to 580 million dollars per year in fuel costs? Jefferies analyst Sheila Kayaoglu calculated in a report that a 10% reduction in passenger weight would lower fuel costs by 1.5%. That could potentially boost profits at airlines such as United Airlines and Delta Air Lines by around 4%.

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