Peasant Year in Brussels | Beursduivel.be
(ABM FN) 2021 was a good year for the stock market for the Bel20. A closing position of 4,310.15 points on December 31, 2021 delivered an annualized price gain of 19 percent.
the Brussels stock exchange performed better than, for example, the German DAX, but less than the AEX in Amsterdam of the CAC40, which, according to the economist Bernard Keppenne of CBC Banque, achieved the best performance among the major stock market indices.
However, the 2022 stock market year will be a completely different stock market year than 2021, thinks asset manager André van Eerden of Aberfeld International.
“I won’t be surprised if the prices fall a bit,” he recently warned in front of the ABM Financial News camera.
And asset manager Cees Smit of Today’s Group is taking a correction into account. But according to him that is healthy, and there is no question of panic.
ABN AMRO investment strategist Ralph Wessels recently pointed out the main risks for the coming year.
“Inflation is unsurprisingly the biggest risk for 2022, especially in the US,” said the investment strategist. According to him, corona mutations, such as omikron, also remain a major risk.
From delta to omikron
Corona mutations will more than once cause shockwaves in the stock markets in 2021, with investors fearing that variants such as delta and omikron lead to new lockdown measures, reducing the economic recovery after corona year 2020.
Notably, the following year more lenient as the approach to new mutations and announced unlike many European countries, no proposed lockdowns. Still, Goldman Sachs recently lowered growth expectations for the US. Not only because the corona support measures that have been worked out in 2020 and 2021, but also because President Joe Biden’s own extensive stimulus plans have not only come in, but do not have enough support to be approved in the US Congress.
In the first quarter of 2022, the US economy is expected to grow by 2 percent, according to Goldman Sachs, compared to 3 percent previously forecast. Growth for the second quarter was adjusted from 3.5 to 3 percent and that for the third quarter from 3 to 2.75 percent.
China is also a risk for 2022, according to Wessels. ABN AMRO recently lowered its growth forecast for the world’s second-largest economy, with the problems in the Chinese real estate market and the corona-like policy being the main risks.
The eurozone is designing to feel the problems of new corona variants and the measures being taken in response.
Credit Suisse predicts the eurozone economy will grow by 3.8 percent next year, which is lower than its forecast of 4.2 percent. Higher vaccination coverage will put an end to the latest virus wave, according to the bank, which will endure prolonged acute pressure on gas prices in the spring.
“We expect the eurozone economy to quickly regain the ground it lost in the winter,” according to the Swiss bank.
High financial banks to intervene
An important theme in the financial markets this year was the rising upward trend. At the beginning of 2021, it was quoted at 0.9 percent in the eurozone and 1.4 percent in the US. According to the most current data, the current one in the eurozone is currently at 4.9 percent and in the US at 6.8 percent.
Wessels of ABN AMRO points out that the current term is “mainly driven by the supply shortage of goods, partly due to a supply squeeze.” He expects these, like the interim, to be removed during 2022.
However, the risk also lies on the services side, Wessels. “Wages are rising and the US labor market is against maximum employment.”
Reason for the Federal Reserve to build corona support. The central bank will do that faster than previously expected, the QE program in March 2022 will probably end. Shortly thereafter, the main interest will be used for the first time. At the moment, the Fed is expected to cut the Federal funds rate three times next year. That prospect provides an impulse, which will rise by about 7 percent against the euro in 2021. The US 10-year yield has risen about 50 basis points this year and is currently trading at 1.46 percent.
The Bank of England increased 15 basis points to 0.25 percent in December. According to market experts, this mainly happened so that the British central bank would not have to take larger steps in 2022.
The European Central Bank is in less of a hurry. Although it will end its corona support program PEPP at the end of March, it will still be accommodative after that, in the form of purchases through its Asset Purchase Programme. The chance that interest rates will rise in 2022 is small, although the ECB does expect it to remain above the target of 2 percent for a large part of the year.
“This is the dovish view [van de ECB] According to the ING economist, this can “come into it faster than one might expect.”
According to economist Luc Aben van Lanschot Kempen, in the coming months, “to return to a normal level, to die and to receive more comfortably.”
Aben points more to “the recovery from the disrupted supply of a (re-)received consumer demand, which is more dispersed across goods and services. That will be a gradual process. The pace of which depends to a large extent on the course of the pandemic.”
Energy prices are skyrocketing
An important driver behind the towering drivers is the rising energy prices. While the oil price still fell sharply in 2020 as a result of the corona demand breakout and the pressure on oil for oil, West Texas Intermediate and Brent learned to recover strongly this year. WTI rose about 60 percent year-on-year and Brent more than 50 percent.
Despite the scarcity in the market and drafted countries like the US, OPEC and its allies drafted huge production agreements and gradual increases in 2021. OPEC+’s reasoning is that the coronavirus will raise OPEC. The group did say that things are going ‘in session’, which means that action can be taken more quickly if the situation on the energy market requires it.
OPEC expects that the growth in demand for oil will only be influenced to a limited extent by the omikron variant and is counting on a further recovery in 2022. Senior energy economist Hans van Cleef of ABN AMRO also points to the gas shortage in Europe, which will no longer be possible this winter. is resolved.
“And the next question in the current market conditions is stocks in time for the winter,” said Van Cleef.
Aben also points to the impact on growth. “Due to geopolitical maneuvers, the gas price shot up in recent weeks. What is not only relevant from development is relevant. Gas are also a potential risk for growth,” wrote the economist of Van Lanschot Kempen.
Risers and Fallers
At the Brussels stock exchange, the biggest winner of the year was not to be found in the Bel20, but in the BelMid. The share of D’Ieteren gained no less than 153 percent this year, followed by VGP with a rise of 109 percent. The price performance of Hyloris, with a plus of 82 percent, is also striking. In the main index, Sofina and WDP dominated with annual increases of 56 and 49 percent, while Galapagos lost 39 percent on an annual basis.
The shares Unifiedpost, Acacia Pharma and Celyad were not invited to the stock exchange party last year, and each lost more than 40 percent in market value. Ontex also gave no less than 36.5 percent.
Source: ABM Financial News
From Beursplein 5, the editors of Financial news from ABM keep a close eye on developments on the stock exchanges, and the Amsterdam stock exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation to make.