Before the bell: Tokyo posts strong gains

Estée Lauder delivers a top day for a Spanish stock. Lower oil prices push Asian markets higher.

Wall Street recorded modest losses yesterday. The S&P 500 declined 0.4%, while the Nasdaq fell 0.8%. Cisco (+2.6%), Caterpillar (+2.1%) and Nike (+1.5%) performed well, but losses at Salesforce (-6.2%), IBM (-3.2%) and Microsoft (-2.7%) were more pronounced than average. Estée Lauder (-9.9%) confirmed its interest in acquiring Puig Brands (+12%), a Spanish peer. That was clearly not well received by shareholders. European markets performed better. The Euro Stoxx 50, like the Bel20, posted a modest gain of 0.10%. In London, the index even rose 0.7%, supported by BP (+3.5%) and Shell (+3.2%). In Brussels, Azelis (+6.6%) and Umicore (+4.3%) stood out, while D’Ieteren lost 2.5%. Coffee company Miko (+4.4%) was rewarded for solid results.

Asian markets are mostly higher this morning, supported by a 4% to 5% drop in oil prices. In Hong Kong, Alibaba is up 5.1%, although the Hang Seng index (-0.1%) is moving sideways. On mainland China, the index is up 1.1%. In Tokyo, the Topix is rising as much as 2.6%, with even stronger gains for Asahi Glass (+3.5%), Daikin (+3.9%) and Mazda (+3.3%). Today, data on business confidence will be released in Belgium. ECB president Christine Lagarde will speak in Frankfurt, and inflation figures will be published in the United Kingdom. A buyer appears to be emerging for Carrefour’s Belgian stores. After the close, results will be published by the listed National Bank of Belgium.

Small Bazar

“German investor wants to acquire Carrefour Belgium,” headlines De Tijd today. We already knew the stores were for sale. Now it seems there is also a buyer. I wish them success. Personally, I would never pursue such an acquisition. Can something be made of Carrefour? Perhaps. But the market is highly competitive, and it would take a small miracle to turn Carrefour Belgium into a success. The chain has been an ugly duckling for so long that the chances of it becoming a beautiful swan seem slim. Do you know what the first stock was that I bought when I started investing in early 1988? GIB Group. The “G” stands for Grand Bazar—the predecessor of Carrefour Belgium. I bought it for the wrong reason. At the time, there was speculation that GIB would be taken over. Carrefour did indeed acquire GIB, but only more than 12 years later. And they have probably regretted it more than once. I sold my GIB shares after about two months and have never invested in GIB or Carrefour again.

Clearing the air—and making money

Buying a weaker company from time to time can happen. That is not a disaster. The key is to sell quickly. There are always better opportunities. Take Air Liquide, for example. I have consistently recommended that stock to investors who believe in the potential of hydrogen. You could invest in small companies betting everything on a hydrogen breakthrough. But why would you? Investing is not gambling. Sound investing means managing risk responsibly. Hydrogen is just one of many areas in which Air Liquide is strong. If hydrogen takes off, the French group will benefit significantly. If not, it will still generate substantial profits from its other strong business segments. This morning, Air Liquide opened a plant in Taiwan to serve its client Taiwan Semiconductor (TSMC). Indeed, chip factories require nitrogen, oxygen, hydrogen, argon and helium. A fine company, Air Liquide—appealing in its solid, understated way.

Did you know…

that even after yesterday’s share price jump, Spanish cosmetics company Puig Brands still trades below its IPO price from May 2024? Puig was listed at 24.5 euro per share, fell to 13.11 euro in October last year, and closed yesterday at 17.59 euro. It is far from certain that Estée Lauder will ultimately acquire the company.

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