VGP Stock Price Falls Amid Unbridled Optimism and Inflation Concerns

Unbridled optimism

This spectacular fall is the result of overly optimistic expectations for a stock operating in a sector where occasional failures and financial losses are the norm. But the stock market works that way, generally moving one step ahead of economic reality. This is the case for the Cote as a whole, which has started to readjust valuations according to a drop in long-term interest rates, itself linked to the drop in central bank key rates… which should not take place only at the end of spring. And the fight against inflation would then have to be won.

Inflation falls again

For the moment, however, everything indicates that this could be the case. As for the euro zone, consumer prices fell by 0.6% in November. On an annual basis, it went from 2.9% in October to 2.4% in November, and the decline has been continuous since April. Core inflation, excluding food and energy products, remains more worrying, at 3.6% in November compared to 4.2% in October and 4.5% in September. Everything must be considered in the perspective of the 2% inflation target set by the European Central Bank (ECB). Let us remember that at the global level, the evolution of prices remains under pressure in part due to the very laborious restart of the Chinese economy, held back by a real estate sector on life support, and by the Party’s interventions in business life. Chinese stock markets will also end their second consecutive year of decline, with Hong Kong currently losing 18% and Shanghai, 11%.

VGP stock price. ©IPM Graphics

Major maneuvers in progress

On the Brussels Stock Exchange where calm settled for the last sessions of the year, with the exception of the cold snap on Argen-x, VGP managed to stand out from the crowd with good strategic news. Slowed down by the withdrawal of its financial partner Allianz, the developer specializing in commercial warehouses, launched a joint venture with the Swedish Areim for a value of 1.5 billion euros. At the same time, the Belgian group announced that it would benefit from a 10-year loan of 150 million euros from the European Investment Bank (EIB) as part of the development of “green” warehouses, in particular thanks to installation of solar panels on their roofs. At the start of 2022, VGP had reached a peak of 252 euros. The stock was trading around 105 euros on Friday after bottoming out at 73 euros.

2023-12-22 16:40:02
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