AEX in a holding pattern
The AEX remained largely unchanged this week. Rising oil prices, moves in bond yields and uncertainty over monetary policy were key themes. Technology shares struggled, while banks, insurers and oil-related companies had a good week.
At the time of writing (Friday morning), the AEX index stands at around 1,107 points, remaining fairly close to last week’s close (1,112 points). ING (+3.7%) tops the list of gainers in the AEX index this week, followed by SBM Offshore (+3.6%) and ASR (+2.7%). The biggest decliners were CVC Capital (-5.0%), Adyen (-4.5%) and ASML (-3.5%).
The week began with escalating tensions in the Middle East after military strikes were carried out by both the US and Iran. Consequently, concerns over energy supply increased once again, leading to higher oil prices. Share prices of SBM Offshore and Shell benefited from this.
Rising bond yields were once again a key market theme this week. This trend has been underway for some time now; see our market comment on rising bond yields. Over the past few days, bond yields have risen further, driven in part by rising energy prices and comments from Federal Reserve Chair Kevin Warsh. Growth shares such as ASML and ASMI came under pressure as a result, which put a damper on the AEX. By contrast, bank and insurance stocks performed well.
It was a relatively quiet week in terms of corporate results and earnings news. Parcel delivery firm InPost reported its results, announcing revenue growth of over 18% and a 16% rise in parcel volume for the second quarter. Adjusted operating profit came in slightly above analysts’ expectations, whilst the margin fell. However, the company did lower its profit forecast for the full year and now anticipates a decline. This is partly due to costs associated with international expansion and a reorganisation in the UK. The share price reaction was, incidentally, very limited. This was entirely attributable to the takeover bid of EUR 15.60 per share currently on the table.
Following the resignation of Fugro’s CFO in April, the geotechnical services company has nominated Emiel Jongerius as its new CFO. Jongerius currently heads the finance division at Just Eat Takeaway.
The share price of private-equity firm CVC Capital came under some pressure this week after industry peer Partners Group published slightly disappointing figures at the start of the week. In addition, it became clear this week that CVC appears to be losing the battle for the takeover of the British firm Bodycote. On Thursday, however, there was more positive news to report. CVC Capital managed to raise no less than USD 10 billion for its Secondary Opportunities Fund VI, a sum that was significantly higher than in previous fundraising rounds. Nevertheless, CVC Capital shares ended the week lower overall.
Next week, investor attention will focus primarily on the European Central Bank’s interest rate decision on Thursday. Markets will also be watching closely for US inflation data and developments in US producer prices.