Hard work pays off

The main company news event last week was of course the announcement on Tuesday that after months of hard work, Ageas was able to reach an amended settlement agreement with the initial signatories VEB, Deminor, SICAF and Stichting FortisEffect with the reconfirmed support by Mr. Arnauts and Mr. Lenssens. The agreement also received the full support of the Dutch consumer organisation ConsumentenClaim, initially one of the main opposing parties at the public court hearing of March 2017. The market reaction was relatively muted but it is also fair to say that the market had already anticipated this positive development. The investment community is of the opinion the amended settlement agreement is a good step towards cleaning up the outstanding legacy issues by reducing the uncertainty currently still weighing on the share price.

Eventually, in a volatile market, the Ageas share price decreased by 1.2% to EUR 41.49 this trading week, while the Eurostoxx 50 lost 0.9% & SXIP 600 Insurance increased by 0.5%.

Last week was also all about Central Banks: on Wednesday, the US Federal Reserve (FED) announced it will increase its target range for the interest rate by a quarter point to 1.25% - 1.5%. This is already the 3rd increase this year and the fifth since the Federal Reserve’s policy-making committee started tightening back in December 2015. Higher interest rates are expected to lift banks stocks, while the pace at which the Fed intends to tighten and normalise monetary policy is seen as a key factor in maintaining the current bull market in 2018. Just hours after the Fed’s decision, China’s Central bank followed suit, increasing the money market rate by five basis points. The increase is more symbolic than substantive and a sign that China values monetary policy coordination and wants to keep the interest rate gap between China and US stable. The European Central bank (ECB) on the other hand reaffirmed its policy stance on Thursday, keeping interest rates unchanged. The ECB also confirmed it will continue to buy assets at EUR 30 billion a month. The Bank of England kept its main interest rate unchanged at 0.50%, a month after increasing borrowing costs for the first time in a decade to contain a rise in inflation fuelled by last year's Brexit vote.