Bel20 closes at the highest level in twelve years

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The Bel20 index ended Wednesday at the highest level since the end of 2007. According to analysts, the Brussels gauge can rise to an absolute record. Although they warn of excessive optimism.

The Brussels meter marked off with a gain of 0.8 percent on 4,184.27 points on Wednesday. That is above the peak of 4,176.88 points of 22 January 2018. This puts the star crate at the highest level since the end of 2007. For an absolute record, the Bel20 still has to climb 14 percent to above the record of 4,756.82 points of 23 May 2007. The basket of Belgian shares has already risen in value by 5.8 percent this year, after having made a nice upward ride of 22 percent in 2019.

The Galapagos share in particular has fired on the Brussels star platoon in recent months. Of the 938 points that the Brussels stock exchange already rose this year, Galapagos was

good for 213 points.

The bank-insurer KBC

was a second engine behind the Bel20 climb

. KBC will publish its annual figures on Thursday. The Colruyt supermarket chain

and the diaper manufacturer Ontex

were the only index inhibitors.

Coronavirus

According to Patrick Casselman, a stock specialist at BNP Paribas Fortis, there may be more in the barrel. ‘We had a bull market on the stock market in the last ten years, which has led to an ever-higher index. You also see a lot of optimism now. ‘

It is remarkable that the stock markets defy the corona virus. Investors assume that the virus will not affect global economic growth throughout 2020. If that does happen, the monetary bonzen will probably be ready for a boost.

“The Bel20 may reach an absolute record this year. Other indexes are also at new heights, “says Casselman.

The Brussels star hive has yet to catch up. While the Bel20 is still a bit removed from its peak, the Dutch AEX index is already 12 percent above its old peak. But it is Wall Street in particular that gives the rest of the world a check. The S & P500 has more than doubled since its last peak.

According to Stefaan Genoe, an analyst from Degroof Petercam, European stock indices such as the Bel20 are lagging behind America because there are relatively few fast-growing technology values. “Earnings growth in the US recovered due to major tech stocks such as Amazon

and Facebook

. Because such shares are often missing in Europe, you can see that the stock markets have risen much less. In addition, there was the debt crisis in the euro zone. ”

Too much optimism?

Although Casselman is considering a new high point for the Bel20 in the coming months, he warns against excessive optimism. ‘Investors are very optimistic and very forgiving. A few weeks ago, the Iran conflict was still escalated, but it has completely disappeared. That also happened with the corona virus. The market thinks that the virus will not have major economic consequences. But I think investors underestimate the impact. ”

The analyst fears a correction by the end of the year. ‘Investors have quite a bit of cash on the sidelines that they want to invest. They see every correction as a buying moment, in the absence of alternatives such as a profitable savings account. Technological growth stocks are especially popular. But there comes a time when people realize that the valuations are exaggerated. This happened recently with the Tesla share

. That doubled in a month due to slightly better figures, but fell back considerably. That can also happen with an entire market, “says Casselman.

Genoe does not think that the shares are necessarily overvalued. ‘You have to weigh them against other asset classes, such as bonds. Due to the low interest rate, the risk premium is (the difference between the return on shares and the bond return, ed.) in Europe 7 to 8 percent, despite the high ratings. There is simply no attractive alternative to shares. ”



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