Before the bell: Tokyo posts gains

Wall Street is optimistic about AI, but excessively pessimistic about weight-loss drugs. There appears to be strong interest in investing in Japan’s largest electricity producer.

Both the S&P 500 (+0.3%) and the Nasdaq (+0.5%) posted modest gains yesterday. IBM (+2.8%) did somewhat better after its chief executive said he expects growth, thanks to AI. Uber (+4.2%) performed even more strongly. The ride-hailing company without cars will collaborate more closely with Nvidia (-0.7%) in the field of autonomous taxis (robotaxis). Eli Lilly (-5.9%) had a poor day following cautious comments from an HSBC analyst, who fears that the potential of weight-loss drugs is being overestimated. The negative market reaction is likely excessive. Sector peer Novo Nordisk lost only a fraction of a percent on Wall Street. In Europe, the shares of the largest listed companies rose 0.5% yesterday. The Bel20 (+0.7%) performed slightly better. Within the Brussels index, Umicore (+3.8%) and Elia (+2.9%) stood out. Energy companies Eni (+3.6%) and TotalEnergies (+2.9%) were also in demand, as was construction group BAM (+5.6%).

In Asia this morning, markets are mostly higher. In Hong Kong, the Hang Seng Index is up 0.7%. The strongest performance comes from Tokyo, where the Topix rises 2.4% and the Nikkei does even better at +2.8%. Shares of Tokyo Electric Power Co. (TEPCO) surge 16.3%. Numerous (financial) parties are showing interest in taking a stake in the electricity company that owned the Fukushima nuclear plant. Shares of Japanese shipping company Mitsui OSK (+11.8%) are also being actively bought this morning. At 1:00 pm our time, Chinese technology company Tencent will publish its results, which are important for major shareholder Prosus. Later today, US memory producer Micron will also report its figures.

Alibaba raises its prices

We still have to wait one more day for Alibaba’s (+2.9%) results. However, this morning the Chinese technology group already announced that it will increase prices for its AI computing and storage products by up to 34%. The price increase reflects strong demand for these products and services, as well as rising infrastructure costs. Alibaba’s AI computing chips will become up to 34% more expensive, while its Cloud Parallel File Storage service will cost customers 30% more. Competitors such as Alphabet and Tencent have also raised prices in the same segment. As a result, it is highly unlikely that customers will walk away when faced with higher bills from Alibaba.

You don’t need to be rich to invest well

You can invest very effectively even with small amounts. And being very wealthy does not necessarily make you a better investor. Even multimillionaires and billionaires who rely on “top specialists” in a family office can get it wrong. Take Marc Coucke and his investment company/family office Alychlo. In May 2021, they invested 26 million euro in yacht builder The Italian Sea Group. One month later, the company went public. Coucke even increased his stake, from an initial 10% to 11.4%. But of that investment of approximately 26 to 30 million euro, only 6.3 million euro remains today. The share had already declined and lost another half of its value this week after accounting irregularities came to light. These things can happen, although fortunately not often. Anyone can make mistakes, but the track record of Coucke’s family office suggests those specialists may be overpaid. Unless, of course, Coucke himself is making the decisions—which seems very likely. You do not need to be rich to invest well. In fact, that wealth can sometimes be a disadvantage.

Did you know…

that the Japanese government holds a stake of more than 50% in TEPCO? This participation is a consequence of the Fukushima nuclear disaster and was intended to prevent the company’s bankruptcy. The firm was subsequently restructured and made attractive again for investors.

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