Euronext Brussels: the wild heights of 1 cent

An inflation windfall also turned the Brussels price board spring green. WDP receives a double top-up from Barclays.

Write it down: June 6, at the stroke of 2:15 p.m. Then the European Central Bank’s first interest rate cut since September 2019 will roll across investor screens. That is almost certain, now that an inflation windfall appears to have paved the way for Christine Lagarde, the president of the European Central Bank.

This is in striking contrast to the Federal Reserve. Investors are once again doubting whether the American central bankers will have room for a first cut since 2020 at their meeting on June 13. Investors currently estimate the chance at no more than 50 percent.

After a faltering start, European investors took courage from the inflation windfall after the off day on Tuesday when trading resumed after the Easter long weekend. The Bel20 closed in Brussels

0.7 percent higher at 3,856 points.

However, the most striking climber was not to be found in the star basket. Not even in Bel Mid or Bel Small, but with the nanocaps: the technology company Crescent

rose 32 percent to 0.0122 euros. It was on November 17 that the share, whose stock ticker OPTI still recalls the former name Option, was once again – for a very short time – worth at least a cent.

The status of centenary share was quickly explained: the full annual accounts will not be released until April 30, but an update in February already showed that the company will be in the red for the 2023 financial year for the eleventh year in a row. However, there was better news on Tuesday: according to a short announcement, Crescent is in discussions with a Dutch group for the sale of its subsidiary 2invision. The sales price would be approximately 7 times EBITDA (operating profit before depreciation).

KBC Securities analyst Guy Sips, the only bank analyst who still monitors the microcap, estimates the acquisition sum at approximately 7 million euros. ‘The sale of 2invision would thus resolve the debt position and – more importantly – the continuous search for working capital.’

Sips puts his advice and price target in brackets pending the annual figures and/or the long-promised share bundling to put an end to the status of a penny share.

Back in the Bel20, WDP raced

1.1 percent higher to 26.14 euros. After a weak start to the year, the stock exchange company Barclays immediately increases its advice from ‘sell’ to ‘buy’ for the specialist in logistics real estate, the price target goes from 25 to 29.5 euros.

“Despite the easy tradability of the share, we believe that investors are relatively ignoring WDP,” writes analyst Paul May in a sector report on logistics.

May notes that investors focus on the 20 percent premium compared to the net asset value, but does not think this is entirely justified. ‘In the case of WDP, the net asset value is calculated on the basis of current rental income, compared to potential rental income (British, ed.) sector peer such as Segro

. If you take the actual cash flow, WDP is cheaper than Segro.’

Given the more risky profile, May maintains the sales recommendation for the logistics real estate developer VGP

, with a price target of 90 euros. “We find the development of land banks riskier and prefer recurring rental income,” it said. VGP dropped 0.8 percent to 102.2 euros.

Finally, the third Brussels logistics player receives neutral advice from Barclays: Montea

. “Montea offers an interesting return and an attractively low debt ratio of less than 40 percent, but we see better growth profiles or easier tradability elsewhere,” the judgment reads. Montea crumbled 0.1 percent to 81.1 euros.

Barclays’ favorite in the sector is Tritax Big Box

. This is a warehouse operator listed in London that is purely focused on the British market and has tax-advantaged REIT status. According to May, Tritax offers an interesting profit yield (profit/market value) of more than 6 percent and, partly thanks to the recent (and not particularly well-received) acquisition of UKCM, an expected annual growth of almost 10 percent on average over the next five years.

Tessenderlo

saw a spurt of 5.5 percent to 24.9 euros. The conglomerate has been buying up its own shares in bulk for years, but is now pulling out the bazooka: purchasing 2.3 million shares for a maximum of 69 million euros.

“The buyback is opportune, as the share is trading below its book value,” a press release said. The share had fallen to the lowest level in four years last week after disappointing annual results.