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It is better to spend the summer at the fair in the shade

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On the stock exchange, winter is usually warmer than summer. But in a thin market, alert investors can take advantage. A few hidden Brussels pearls are throwing themselves up like umbrellas against the inflationary heat.

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Until the delta variant decides otherwise, we can travel carefully again this summer. I retire with my family to a mountain hut in the Abruzzo, where I intend to follow as little (stock exchange) news as possible for the sake of marital peace.

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What the traveling middle class used to forget is that many people spend the summer months at home. After years of nagging, Brussels finally gave its people an open-air swimming pool. The beautiful bath in Anderlecht is barely a postage stamp, but it is something.

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The Dow Jones combined almost all of its historic gains between September and May.

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Staycations have not become easier because of corona. For the second year in a row, Brussels has had to do without Brussels-Bad, the apron of the old Citroën site on the Akenkaai, adorned with decorative sand and cocktail stalls, where Brussels residents could imagine themselves on Copacabana beach with some sense of imagination. Brussels-Bad was Brussels at its best. Traders from KBC’s trading room sat there after-work brotherly next to urban dancers and sunbathing Latinas. You also ate the best banana plantain in Europe and I suspect a significant part of Africa as well.

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But before you rightly suspect me of agenda-setting at the Brussels mayor’s cabinet, my point. Summer is not always one big sun-drenched Ibiza party. Winter is usually much warmer on the stock exchange. The numbers don’t lie. The Dow Jones combined almost all of its historic gains between September and May. There are few in-depth explanations for this, other than the general assumption that professional investors lie on their lazy haidewiets drinking coconut milk in the summer.

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In the thin summer trading season, small sell orders up to
lead to large movements. For the small investor, this is quite tricky. Because of the thin
order book, the spread between the bid and ask prices is wider and threatens to buy you more expensive.

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Before you promptly liquidate your portfolio, there are many more arguments for staying in the market over the summer. The Dow Jones example is just an average. In only 11 of the past 30 summers, that is, only slightly more than one in three summers, you had actually suffered a loss. In the always somewhat counter-productive Bel20, July and August turn out to be strong stock market months in most years (see chart). Moreover, if you jump in and out too quickly, you miss out on long-term returns due to the strength of the compound interest. And you pay blue in the costs.

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Camping

In the Netherlands they probably remember the hot summer of 1997, when the
AEX explored new peaks in a true ‘camping boom’. Private investors continued to call in orders from their holiday addresses with the then brand new mobile phones such as the Nokia 3110 and the Ericsson GA628. At its peak in August, the Amsterdam star index rose above 1,000 points (in guilders, more than 450 points in euros), 56 percent higher than its value on January 1, 1997. The rise was completely unexpected and at odds. The then Fed boss Alan Greenspan warned shortly before about an overvaluation of the financial markets.

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In addition to the eruption of the half-year figures, inflation also promises to remain a hot topic.

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There will be plenty of news flow to guide the market this summer. In addition to the eruption of the half-year figures, inflation also promises to remain a hot topic. On the same day that the Germans were kicked out of the European Championship by the English, the German ECB striker Jens Weidmann suggested that it seemed opportune to extinguish the pandemic support.

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A very different sound was heard from the victorious English. The Bank of England characterized the inflation surge as temporary and thus cooled fears that it would tighten its monetary policy too soon. The fact that fierce discussions about the increasing lifespan will follow this summer is an open goal. After a dazzling first half of the year, it can do no harm as an investor to seek shelter in that context. The S&P gained 16 percent in the first half, the Bel20 was almost as strong, posting a 14 percent gain since January. Even the most rabid bulls don’t believe that performance can be matched in the second half of the year.

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Beacon of peace

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That changed on Monday when Inclusio closed a big deal in Tournai, on top of a smaller one in the carnival town of Binche. These Hainaut deals represent 12 percent of the portfolio value and are financed to a small extent by issuing new shares. Despite the issuance of the new shares, Inclusio gained 0.2 percent to 21.45 euros, just above the subscription price with which it went public in December. In other words: who in this
manic times seeks a soothing share, it may hit worse than with
Inclusio, which boosts its tradability a bit with the new shares.

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Once a week



The hidden grower Aliaxis has already won more than a quarter this year to become a rival of industrial stars such as Bekaert and Barco with a market value of 2 billion euros.

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We suspect that the Emsens family keeps the listing mainly in order to be able to sell on time and on time. She does not like to go public after the nightmare with the asbestos sheets of Eternit, of which Etex is the heir apparent. The investor would nevertheless be eager for a continuous listing of Etex and the spin-off company Aliaxis. The maker of sanitary pipelines grew into a multinational company of its own within Etex. Also Aliaxis is listed on the Expert Market and has already won more than a quarter this year, with a market value of 2 billion euros to form a rival to industrial clappers such as Bekaert and Barco.

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As the seemingly never-ending heat wave begins to cool off on the stock markets, those hidden growers deserve more attention. Or as the American poet with the appropriate investor name Longfellow put it so beautifully: when the sun goes down,
stars appear in the sky that cannot be seen by day.

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