Market Commentary July 2023

Although still inverted, yield curves in Europe flattened slightly in July. In other words, shorter maturities corrected more strongly than longer ones. Not surprisingly, while inflation in Europe was still measured at almost 11% at the end of October, it was halved last month to 5.5%. The financial markets are therefore expecting a final interest rate step at the end of this year.

Overseas, an interest rate hike would come as a surprise from the current perspective of the financial markets. Already in May next year, the first interest rate cut is expected in the U.S., at least this is indicated by the futures markets. In Europe, the time is expected to come in just under a year.

Holdings

As a result of the takeover bid by the Rothschild family to delist their private bank, we sold our stake.

Tops

The Italian defence company Leonardo S.p.A. won various new orders, and the shares also benefited from significantly better-than-expected operating cash flow. This helped the shares to gain more than 18%.

The shares of British real estate developers, which were ostracized in the previous month, showed a significant counter reaction and are now among the clear winners in July: Persimmon Plc (13%), Bellway Plc (12%), Taylor Wimpey (12%).

The significantly better than expected earnings helped the shares of the British utility company Centrica Plc to advance by more than 11% in the reporting period.

Flops

The corporate result of the Swiss consumer credit company Cembra Money Bank AG disappointed and put its shares under pressure accordingly (-9%).

The announced reorganization of the management of German chemicals trader Brenntag SE has so far failed to convince potential investors, which is why the shares lost slightly more than 1% over the month.

Freight rates remained stable over the month, which in turn was reflected in D/S Norden's share prices coming on line.

Please do not hesitate to contact us if you have any queries regarding the fund.

Sincerely

Your CIIM Team