BeBeez roundup with eToro support about the performances of private capital firms listed on global exchanges.
Volatility prevailed il last week trading as Donald Trump said that from 3 April, Thursday, his administration will start implementing a protectionist policy for the US foreign trade. Fed’s directors outcasted shadows on spiking inflation that may lead the central bank to raise the interest rate.
Tariffs on 25% on imported intermediate goods and components would increase costs on US firms. The tariff shock is a typical supply-side shock for which the monetary policy can do little. However, this policy could make necessary secondary adjustments, such as a rise in wages, which push up inflation and thus call upon the central bank to increase the borrowing costs.
In such a scenario, investors do not expect further falls in rates, and this hurts the stock price of listed investment holding companies, including those that BeBeez and eToro selected for Trading Floor. Between 24 and 28 March, Monday and Friday, only 12 of the 45 portfolio stocks closed the week with a positive performance.
Canada’s Brookfield Infrastructure Partners, benefited from the 21 March, Friday, sale announcement of its stake in a US gas pipeline company for 1.7 billion US Dollars, realising an IRR of 18% and cashing in 1.8 X its invested capital, further improving the group’s liquidity, which shields it from interest rate hikes (press release).
In the same week, BlackRock TCP Capital Corp, a provider of direct lending to mid-caps, posted a +3.4% as its floating rate loans would be more profitable after an interest rate hike.
Belgium’s Sofina shares went up 2.7% as its 2024 NAV grew by14% and its unit dividend by 4.5 for a total of 3.5 euros.
On the other end, investors kept taking profits on Frankfurt-listed investment holding Mutares whose shares plummeted by 13,5%. Between 10 and 14 March, Monday and Friday, the company’s market capitalization grew by +32% as the EU Commission announced the launch of Rearm Europe. Such a statement has been beneficial to the defence sector in which Mutares carried on several investments, including a 70% of Austrian Steyr (see here a previous post by BeBeez).
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