Brussels: Hooray, interest rates are rising!
Home » today » Business » Brussels: Hooray, interest rates are rising!

Brussels: Hooray, interest rates are rising!

by

–

Investors worry about central bankers rushing to the exit and pushing interest rates higher. All investors? No, for the Agfa investor, the interest can be a little higher.

–

Lael Brainard. Until recently, the US central banker was the investor’s ‘buddy’ as a super pigeon – with a greater focus on growth than on inflation. See you Tuesday evening. Then the Fed executive gave a interesting speech in which she underlined that persistently high inflation is hitting the lowest-income Americans hardest. That is why it is the job of the central bank to put a lot of effort on the brakes in the fight against inflation through a ‘rapid’ reduction in the bulk purchases of debt and a corresponding increase in interest rates.

–

–

Investors are now anticipating that, including the first 25 basis point step in March, the Fed will hike rates by a total of 250 basis points this year. That would be the fastest tightening of monetary policy since 1994.

–

Not only is Wall Street the global ‘price setter’ for money, but in Europe too, investors are ramping up expectations about how quickly the European Central Bank will reverse the pandemic stimulus.

–

That realization pushes the stock markets – until recently in ‘what me, worry?’ mode – firm in red† In Brussels, the Bel20 dropped 1.9 percent to 4,161 points. Solvay

again dropped 3.4 percent to 85.54 euros. In an early preview of the chemical group’s quarterly report, on May 4, the UBS stock exchange maintains its sell recommendation and its price target of 83 euros.

–



We do not expect Solvay to be able to fully offset the increase in energy and raw materials bills with price increases in the first quarter alone.

–

“We expect Solvay to see its first quarter operating profit decline by 4 percent, despite a 17 percent increase in sales,” analyst Geoff Haire said. ‘Because the group cannot fully compensate for the increase in energy and raw materials bills with price increases alone.’

–

–

A contrarian climber was Agfa-Gevaert

† The imaging group rebounded 1.5 percent to 3,765 euros. Stock exchange Kepler Cheuvreux resumes monitoring the share with a firm price target of 5 euros and logically a buy recommendation.

–

According to analyst Alexander Craeymeersch, there is a lot of hidden value in Mortsel. The perception of the stock is negative, due to the loss-making core division Offset (printing press plates, ed.† According to the analyst, it overshadows the two growth engines with a strong market position: the digital printing products and services and the remaining healthcare activities.

–

–

And this is where the analyst makes perhaps the most interesting observation in the more than 70-page report: Agfa is one of the few stocks on the Brussels price board that capitalizes on rising interest rates. This is how it works: the higher the interest rate, the higher the ‘actuarial interest rate’ to translate future pension benefits into the present, and thus the lower the present value of the future invoice.

–

In the 2021 financial year, Agfa was already able to reduce the gap in the pension fund from 900 to 670 million euros by using a significant part of the proceeds from the sale of the bulk of the IT department to be deposited in the fund. As a result, it is expected that the pension fund will absorb 55 million euros in cash this year, while it used to be often more than 80 million was.

–

–

Orange Belgium

once again crumbled 1.2 percent to 18.30 euros. After market leader Proximus on Monday Bank HSBC now also removes number three in the Belgian market for telecom services from the purchase list.

–

There is no sign of that price war for the time being, on the contrary. Following Proximus, Orange Belgium also announced on Tuesday strong price increases at. Typically for the Belgian market, these are put in a more-for-more outfit (together with the price increases you also get a higher data limit, for example), but the price increase remains strong.

–



Not only is this a risky move for Orange Belgium, but we believe it also means the end of its price-breaker status.

–

ING analyst David Vagman notes that the price increase for the datavretersformule Go Extreme to 10 percent. The penalty rate for using more than allowed also rises sharply.

–

“For Orange Belgium this is not only a risky move, but we also think it means the end of its price-breaker status,” says Vagman. ‘Not so much in the bundles, but in the mobile offer.’ Vagman notes that Orange Belgium is not raising prices for its Hey entry-level formula, indicating that that B-brand is competing with a potential fourth player will have to engage.

–

eye-catcher

The European stock markets opened almost stable, but then ended up in a slide. Investors worry about the impact of high interest rates. Witness the heavy blows to European technology stocks (-4%). Colruyt once again lived up to its status as a crisis share and rose almost 2 percent, good for gold in the Bel20.

–

The European Central Bank (ECB) publishes the minutes of its latest monetary policy meeting. The ECB decided to accelerate bond purchases, but has not yet revealed the timing of the first rate hike.

–

–

–

Related posts:

Zelenskyy shows off F-16 jets to fight Russia
Indication of Salim's Entry into BRMS Strengthens, Here's the Hint!
Honda Fit e:HEV Facelift Released, There is an RS Variant!
New museum and an ice rink: this French municipality became rich from its nuclear power plant
Dr. Ivanov pointed out what blood thinners can lead to

Dr. Ivanov pointed out what blood thinners can lead to

Complete Specifications of HP Realme C35, 6.6 Inches Screen, 5000 mAh Battery with 18 W Quick Charge

Complete Specifications of HP Realme C35, 6.6 Inches Screen, 5000 mAh Battery with 18 W Quick Charge

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.