Category Archives: Uncategorized

Europol seized illicit online pharmacies

In the largest action of its kind, INTERPOL’s Operation Pangea X targeting the illicit online sale of medicines and medical devices, saw some 400 arrests worldwide and the seizure of more than USD 51 million worth of potentially dangerous medicines.

Europol supported INTERPOL’s Operation Pangea with two analysts performing checks on entities against Europol’s databases. In addition, a specialist and an analyst with a mobile office and a device for forensic support were sent by Europol to Budapest, Hungary, to conduct checks on the spot.

Overall, involving 197 police, customs and health regulatory authorities from a record 123 countries, Operation Pangea X led to a record number of 25 million illicit and counterfeit medicines seized worldwide.

The action resulted in the launch of 1058 investigations, 3584 websites taken offline and the suspension of more than 3000 online adverts for illicit pharmaceuticals.

Among the fake and illicit medicines seized during the international week of action (12 – 19 September) were dietary supplements, pain reduction pills, epilepsy medication, erectile dysfunction pills, anti-psychotic medication and nutritional products.

In addition to medicines, Operation Pangea X also focused on the sale of illicit medical devices, such as dental devices and implants, condoms, syringes, medical testing strips and surgical equipment. Illicit devices worth an estimated USD 500 000 were recovered.

Starting with just eight countries in 2008, Operation Pangea has grown exponentially during the past 10 years, with police, customs and drug regulatory authorities from 123 countries taking part in 2017.

The main trend identified during the decade of Pangea operations is the continuous growth of unauthorised and unregulated online pharmacies, which capitalise on increasing consumer demand worldwide to advertise and sell illicit or counterfeit medicines.

Eurostat: Industrial production down by 0.6% in euro area

In June 2017 compared with May 2017, seasonally adjusted industrial production fell by 0.6% in the euro area
(EA19) and by 0.5% in the EU28, according to estimates from Eurostat, the statistical office of the European
Union. In May 2017, industrial production rose by 1.2% in both zones.
In June 2017 compared with June 2016, industrial production increased by 2.6% in the euro area and by 2.9% in
the EU28.

Monthly comparison by main industrial grouping and by Member State

The decrease of 0.6% in industrial production in the euro area in June 2017, compared with May 2017, is due to
production of capital goods falling by 1.9%, durable consumer goods by 1.2%, non-durable consumer goods by
0.4% and intermediate goods by 0.3%, while production of energy rose by 1.8%
In the EU28, the decrease of 0.5% is due to production of capital goods falling by 1.5%, durable consumer goods
by 0.8%, intermediate goods by 0.4% and non-durable consumer goods by 0.3%, while production of energy rose
by 1.4%. Among Member States for which data are available, the largest decreases in industrial production were registered in Ireland (-7.5%), the Czech Republic (-3.8%) and Malta (-3.2%), and the highest increases in Luxembourg (+3.4%), Estonia, Croatia and the Netherlands (all +1.2%).

Annual comparison by main industrial grouping and by Member State

The increase of 2.6% in industrial production in the euro area in June 2017, compared with June 2016, is due to
production of energy rising by 5.1%, durable consumer goods by 4.0%, intermediate goods by 3.8%, capital goods
by 1.6% and non-durable consumer goods by 0.6%.
In the EU28, the increase of 2.9% is due to production of durable consumer goods rising by 4.2%, intermediate
goods by 3.9%, energy by 3.7%, capital goods by 2.4% and non-durable consumer goods by 1.5%.
Among Member States for which data are available, the highest increases in industrial production were registered
in Estonia (+14.5%).

EU agriculture: new crops’ market observatory

Today’s meeting is the fulfilment of a commitment to extend to the crops sector the successful story of the Market Observatories for Milk, Meat and Sugar. The EU Crops sector plays a key rolefor the global competitiveness of European agriculture. It is therefore our ambition for the Observatory to become an additional and useful tool to manage the market more effectively“. Said Commissioner for Agriculture and Rural Development Phil Hogan.

The Commission launched a market observatory for crops to ensure more transparency and increase availability of market data for European farmers and traders. A range of market information and short-term analysis will be made available on a new dedicated website. The observatory consists of 14 organisations representing various stages of the grain supply chain. A board of 23 market experts will meet twice a year, chaired by the Commission. Crops production is an essential part of the EU farming activity, with over 300 million tonnes of cereals, 30 million tonnes of oilseeds and five million tonnes of protein crops produced every year.

Egmont Group and Europol a new strong cooperation

During the 24th Egmont Group Plenary Meetings that took place in Macau, the European Commissionand Europol were awarded Observer Status of the Egmont Group of Financial Intelligence Units(FIUs).

The decision will lead to increased cooperation not only between , but other competent authorities tasked with combating money laundering, terrorist financing and organised crime, facilitated by Europol’s role as an European hub in support of Member States on ongoing operations.

The Egmont Group is a united body of over 150 FIUs that provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing. At the meeting, Ms Hennie Verbeek-Kusters (FIU Netherlands) was appointed as Chair of the Egmont Group for the coming two years.

The European Commission and Europol strongly support the objectives of the Egmont Group by encouraging cooperation between FIUs at an EU level.

Together with EU FIUs, the European Commission and Europol are actively involved in ensuring the integrity of European markets through work with the EU FIU, the recently implemented Fourth Anti-Money Laundering Directive and the implementation of the EU Action Plan against terrorist financing.

New EU rules that strengthen the role of and cooperation between FIUs came into force across Europe on 26 June.

EU-Japan Energy Dialogue: a wide-ranging partnership

105729Energy policy-makers from the EU and Japan are due to discuss topics that include electricity market design, renewable energy and energy efficiency policy, and energy research and innovation. They will also focus on the global liquid natural gas (LNG) market, in preparation for a bilateral Memorandum of Cooperation to promote the liquidity, flexibility and transparency of this market. They will meet today in Brussels as part of the EU-Japan Energy Dialogue.

Collaboration with Japan on energy issues is central to the EU’s international cooperation in energy. It is particularly strong in the areas of LNG and electricity market reform as well as in innovative energy technologies. Today’s meeting will be followed by a EU-Japan Energy Business Seminar that will consider the perspectives of the EU and Japanese business sectors on the clean energy transition. Participants from the European Commission, Japanese government and European and Japanese businesses will discuss the creation of more flexible energy systems, their impact on the energy consumer market, and the implementation of storage solutions that allow the maximum possible use to be made of energy from renewable sources.

Source: Dg energy

EU-China Summit: moving forward with our global partnership

Jean-Claude Juncker, Li Keqiang,

The 19th Summit between the European Union and the People’s Republic of China held today in Brussels has brought a number of important developments to the bilateral relationship, as well as providing fresh impetus to a partnership that has a global impact.

President Juncker, along with Donald Tusk, the President of the European Council, represented the European Union at the Summit. The People’s Republic of China was represented by its Premier, Li Keqiang. The High Representative of the Union for Foreign Affairs and Security Policy/Vice-President of the Commission, Federica Mogherini, Trade Commissioner, Cecilia Malmström, and Commissioner for Research, Science and Innovation, Carlos Moedas, as well as the Minister of Foreign Affairs, Wang Yi also attended the Summit.

Delivering for a stronger partnership

During the Summit, a number of agreements were signed that will concretely strengthen what is already a comprehensive relationship. In addition, several EU-China meetings covering specific policy areas, held in the margins of the Summit, also brought positive outcomes.

Climate action:

At the Summit, EU and Chinese leaders reaffirmed their commitment to implementing the 2015 Paris Agreement on climate change and, as major energy consumers and importers, highlighted the importance of fostering cooperation in their energy policies.

At the joint press conference following the Summit, President of the European Commission Jean-Claude Juncker said: “As far as the European side is concerned, we were happy to see that China is agreeing to our unhappiness about the American climate decision. This is helpful, this is responsible, and this is about inviting both, China and the European Union, to proceed with the implementation of the Paris Agreement.”

EU and Chinese leaders also looked forward to co-hosting, along with Canada, a major ministerial gathering in September to advance the implementation of the Paris Agreement and accelerate the clean energy transition.


In the margins of a productive Summit, during which leaders were able to constructively discuss topics across the entire spectrum of EU-China relations, the 12th EU-China Business Summit provided an opportunity for EU and Chinese leaders to exchange views with representatives of the business community on economic relations between the European Union and China and on the challenges that remain.

In his keynote speech, President Juncker said: “Our relationship is founded on a shared commitment to openness and working together as part of a rules-based international system. I am glad that we can meet here today and say this, loud and clear. It is one that recognises that together we can promote prosperity and sustainability at home and abroad. We applaud the ambition of China’s reform path. We recognise that reforms have been made and that plans have been established. But we would like to see implementation speed up – so that your policies are in line with your world vision.

In her speech, Commissioner Malmström stressed that: “Sound economic development, trade and investment also require respect for the rule of law, with independent lawyers and judges who can operate freely and independently. To conduct business — and for their daily lives — people need to be able to access free and independent information, communicate and discuss. This is a fundamental human right which also applies in the age of the internet. Limits to online freedom also affect peoples’ lives and the business climate.

Regional and global challenges:

Discussions at the Summit demonstrated the shared commitment of both the European Union and China to addressing regional and global challenges such as climate change, common security threats, the promotion of multilateralism, peacekeeping and peace-building. Comprehensive discussions took place between the Summit participants on how to advance cooperation and joint action in the area of foreign and security policy, in particular on the situations on the Korean Peninsula, in Ukraine, Afghanistan and Syria, on the implementation of the Joint Comprehensive Plan of Action, and on Myanmar.

Competition policy:

European Commissioner Margrethe Vestager, in charge of competition policy, and He Lifeng, Chairman of China’s National Development and Reform Commission, signed a Memorandum of Understanding to start a dialogue on state aid control. The state aid dialogue creates a mechanism of consultation, cooperation and transparency between China and the EU in the field of state aid control. A full press release on this Memorandum of Understanding is available here.


The European Investment Fund (EIF), part of the European Investment Bank Group, and China’s Silk Road Fund (SRF) have signed a Memorandum of Understanding with the aim of jointly investing in private equity and venture capital funds that will, in turn, invest in small and medium-sized enterprises (SME) located primarily in the EU. The European Commission and China’s National Development and Reform Commission have played an important role in supporting the negotiations which led to the signature of the Memorandum of Understanding. The total expected commitment amounts to €500 million, of which €250 million would be financed from the EIF and €250 million from the SRF.  The signature follows the commitment made by China at the High-Level Economic and Trade Dialogue in 2015 to examine opportunities to contribute to the Investment Plan for Europe, the so-called “Juncker Plan” and enhance cooperation with the EU on investment issues generally. The initiative would complement the SME window of the Juncker Plan’s European Fund for Strategic Investments (EFSI), which is already expected to facilitate access to finance for some 416,000 small businesses across Europe.

Energy cooperation:

Following the EU-China High Level Energy Dialogue, which took place this morning, Commissioner for Climate Action and Energy Miguel Arias Cañete and Mr Nur Bekri, Vice-Chairman of the National Development and Reform Commission and Administrator of the National Energy Administration of China signed the Work Plan 2017-2018 of the Technical Implementation of the EU-China Roadmap on Energy Cooperation. This Roadmap, agreed in June 2016, commits both sides to tackling common energy and climate challenges, including security of energy supply, energy infrastructure and market transparency. The Roadmap lays the foundations for sharing best practices with regards to energy regulation, demand and supply analysis, energy crisis, and nuclear safety, as well as grid design and the integration of renewable energy into the electricity grid.


The second meeting of the EU-China Connectivity Platform enabled progress on: (i) policy exchange and alignment on the principles and the priorities in fostering transport connections between the EU and China, based on the TEN-Ts framework and the Belt and Road initiative, and involving relevant third countries; (ii) cooperation on promoting solutions at the international level with a focus on green transport solutions; (iii) concrete projects based on agreed criteria including sustainability, transparency and a level-playing field. The joint agreed minutes of the Chairs’ meeting are available here, along with the list of European transport infrastructure projects presented under the EU-China Connectivity Platform.


European Commissioner for Economic and Financial Affairs, Pierre Moscovici, and the Minister of Customs of China, Mr Yu Guangzhou signed a Strategic Framework for Customs Cooperation for the years 2018 – 2020, setting out the priorities and objectives for EU-China customs cooperation for the years ahead. The framework’s priority areas of focus are protecting citizens and combating illegal trade through effective customs controls, at the same time speeding up and reducing administrative burdens on legitimate trade. The Framework supports continued cooperation on supply chain security while facilitating reliable traders, the enforcement of Intellectual Property Rights, and the fight against financial and environmental fraud. Cooperation has also now been extended to the field of e-commerce. More details are available online.

Trade and agriculture:

Commissioner Malmström and her Chinese counterpart, the Minister of Commerce, Mr Zhong Shan, signed important documents covering the protection of intellectual property and geographical indications.

The administrative arrangement related to EU-China cooperation on the protection and enforcement of intellectual property rights aims to ensure smooth cooperation between the European Commission and the Ministry of Commerce of China in the implementation of the new phase of the programme “Intellectual Property: A Key to Sustainable Competitiveness”. This programme has, since 2013, been the European Commission’s main instrument to address legal challenges faced by EU businesses in China. These include, for example, patents, trademarks, and industrial designs. The new phase, funded under the Partnership Instrument, will run from 1 September 2017 until 2021.

Commissioner Malmström, on behalf of the European Commissioner for Agriculture, Phil Hogan, and on the Chinese side, Mr Zhong, also signed an agreement committing both the European Union and China to publish, on 3 June, a list of one hundred European and Chinese geographical indications. This publication opens the process for protecting the listed products against imitations and usurpations and is expected to result in reciprocal trade benefits and increased consumer awareness and demand for high-quality products. More information on this agreement is available online.

Research and innovation:

In the field of research and innovation, the European Union and China have agreed to boost their cooperation with a new package of flagship initiatives targeting the areas of food, agriculture and biotechnologies, environment and sustainable urbanisation, surface transport, safer and greener aviation, and biotechnologies for environment and human health. These initiatives will translate into a number of topics for cooperation with China under Horizon 2020, the EU’s funding programme for research and innovation. The 3rd EU-China Innovation Cooperation Dialogue, co-chaired by Carlos Moedas, Commissioner for Research, Science and Innovation, and Wan Gang, China’s Minister of Science and Technology, took place in the margins of the Summit. Both sides agreed on the renewal of the EU-China co-funding mechanism for research and innovation for the period 2018-2020, and on its application to future SME cooperation and to support start-ups. Both sides also confirmed their commitment to improving framework conditions, notably reciprocal access to Science and Technology and Innovation resources, and to promoting open access to publications and research. More information is available online.

The European Commission’s science and knowledge service, the Joint Research Centre (JRC), under the responsibility of Tibor Navracsics, Commissioner for Education, Culture, Youth and Sport, and the Chinese Academy of Sciences signed an overarching Research Framework Arrangement, building on their longstanding and fruitful cooperation in the field of remote sensing and earth observation. The objective of the agreement is to expand their collaboration and develop new scientific approaches in key areas, such as air quality, renewable energy, climate, environmental protection, digital economy, regional Innovation policy and Smart Specialisation. More information is available online.


The European Union and China signed an Arrangement on the implementation of the 2018 EU-China Tourism Year. Good progress is being made on preparation of the tourism year, which should promote lesser-known destinations, improve travel and tourism experiences, and provide opportunities to increase economic cooperation. This initiative also provides an incentive to make quick progress on EU-China visa facilitation and air connectivity.

Maritime affairs:

Representatives from the European Union and China signed in the margins of the Summit a Joint Press Statement on the 2017 EU-China Blue Year. As part of this EU-China Blue Year, a series of activities on ocean matters are taking place. These activities aim to foster closer ties and mutual understanding between European Union and China and highlight a strong China-EU maritime relationship.

The SaloneSatellite turns 20


Since 1998 the SaloneSatellite has been the international springboard for young designers under 35 and a meeting place for designers and manufacturers in the furniture industry. A 20th edition dedicated more than ever to design, and celebrated with a collection designed expressly for the occasion, and by a major exhibition in the city.

Major celebration for the SaloneSatellite, which turns 20 this April: an impeccable pedigree that earned it a career Compasso d’Oro in 2014, and a rich history: more than 10,000 young designers have participated in the 19 previous editions, many of whom have become internationally acclaimed – Matali Crasset and Patrick Jouin (France), Harri Koskinen and Ilkka Suppanen (Finland), Tomoko Azumi and Nendo (Japan), Sean Yoo and Cory Grosser (USA), Front and Johan Lindstén (Sweden), Xavier Lust (Belgium), Daniel Rybakken (Norway), Satyendra Pakhalé (India), Federico Churba (Argentina), Lorenzo Damiani, Tommaso Nani, Cristina Celestino and Francesca Lanzavecchia (Italy), to name just a few – as well as 270 of the most prestigious international design schools.

Installed in Pavilions 22-24, with free admission for the general public from Cargo 5 (for those already inside the fairgrounds, through the biennial exhibition Workplace3.0, with which it shares the same pavilions), the SaloneSatellite will run from 4th to 9th April at Fiera Milano Rho, concurrently with the Salone Internazionale del Mobile, the International Furnishing Accessories Exhibition, Euroluce, and as mentioned, Workplace3.0.

Like every year, the installation and a number of projects by the young designers will follow a chosen theme which, for this edition, is entitled “DESIGN is…?”: an open question, at once relevant and crucial. Rather than asking for a response, it opens the door to new reflections on the value of design and processes: an invitation, therefore, for young designers to test their ability to listen and dialogue with an increasingly sophisticated and attentive audience, to search for new solutions, both tangible and intangible, both individual and collective, geared towards building a better future.

Technological progress and the evolution of the web in recent years are redefining the paradigms of design, opening new fields of action: from research on advanced materials to interface design, from service design to rapid prototyping. In this complex and multifaceted scenario, industrial design is looking toward the future, working to respond to new needs and desires in a constant dialogue with a changing world.

The projects of the c. 650 participating designers from around the world were selected last October by a prestigious Selection Committee composed of internationally prominent figures in the fields of design, manufacturing and media: Aldo Cibic, architect/designer; Beppe Finessi, design critic; Corinne Julius, journalist, London Evening Standard, Homes & Property, Blueprint, BBC Front Row; Davide Groppi, architect/designer – CEO of Davide Groppi SRL; Francesca Taroni, journalist, Living (RCS); Giovanni Anzani, CEO of Poliform SpA: Matteo Thun, architect/designer; Michael Erlhoff, Professor at the Hochschule für Bildende Künste Braunschweig (HBK); Paolo Ulian, designer; Terry Dwan, architect/designer and Marva Griffin, founder and curator of the SaloneSatellite.

It’s the 8th edition for the SaloneSatellite Award, which facilitates more targeted contacts between designers under 35 and the exhibitors at the Salone del Mobile.Milano. The Jury, also composed of key figures in the design world, is headed by Paola Antonelli, Senior Curator of Architecture & Design and Director of Research & Development at the Museum of Modern Art in New York, will choose the 3 best projects, whose designers will be awarded a cash prize. The winners will also enjoy consulting and press office services, with the aim of ensuring maximum visibility for the winning products.

The first 20 years of the SaloneSatellite will be celebrated with a special edition of pieces commissioned expressly for the occasion to established international designers, whose common denominator is having started their career in the past editions of the SaloneSatellite. Some of the pieces will be self-produced by the designers themselves, others will produced and marketed by companies exhibiting at the Salone del Mobile.Milano. All pieces will form the SaloneSatellite 20 Years Collection, which will be displayed in Pavilions 22-24 of the SaloneSatellite from 4th to 9th April.

The birthday festivities will continue in the city proper at the Fabbrica del Vapore, where a major exhibition, curated by Beppe Finessi and entitled SALONESATELLITE. 20 Years of New Creativity, will present an anthology of pieces from the Satellite’s history that have gone into production.

Gala Antonio

New equities fund invests in listed European family businesses


Persistently low interest rates, the resulting quest for yield and control of risks are the main concerns for investors seeking to invest in equities.

Against this backdrop, BLI – Banque de Luxembourg Investments S.A. will launch the BL-European
Family Businesses fund, a new equities fund that invests in around 60 listed European family
The current economic and financial situation is changing investment habits. An environment of
persistently low interest rates, the resulting quest for yield and control of risks are the main concerns
for investors seeking to invest in equities. Against this backdrop, Luxembourg-based asset
management company BLI – Banque de Luxembourg Investments has decided to launch a new
equities fund, the BL-European Family Businesses fund. The sub-fund is composed of around 60
listed European family businesses, rigorously selected according to strict criteria: a clear competitive
advantage, strong profitability, a value-creating business strategy and attractive valuation.
A distinctive management approach
“One distinguishing characteristic of family businesses is that they are not driven by short-term
financial objectives. Because of the family’s commitment to the next generation, the company naturally
develops a long-term strategy with an underlying desire for continuity and resilience over time. Of
course, growth and performance are also important, but these goals are balanced by socio-economic
values that can strengthen the organisation and its position in the market,” says fund manager Ivan
Bouillot, who is also fund manager for the BL-Equities Europe fund since 2004.
“Family business leaders are also able to steer the company’s strategy and shape the corporate
culture through the values they advocate, their passion for their profession and their social
commitment. It was during meetings with family business owners that we began to appreciate the
added value of businesses managed by families, and the idea of developing this family business fund
project grew from there.”

The BL-European Family Businesses fund invests in European equities, regardless of market
capitalisation. We define a company as a family business if at least 25% of its equity is owned by the
person or family that founded the company or acquired the company’s capital, if the family has an
active role in the company as a manager or a board member, and if there is a desire to preserve the
company as part of the family’s wealth.
Continuity in our development
“With this new fund, we continue to apply our proven investment strategy, which involves selecting
quality companies and taking an interest in their long-term development”, explains Head of Sales, Lutz
Overlack. “Our strategy focuses mainly on manufacturers of personal and household goods, food and
beverages and companies in the industrial, healthcare, chemistry and technology sectors.” Banking
and insurance, capital-intensive industries, commodities and telecommunication companies are
excluded from all the funds in the BL funds range.

Source Bank of Luxembourg


Universal Press



Investing in Japan – Thematic investments in light of the Pokémon Go craze




Unless you’ve been living under a rock during the past few weeks, you must have heard about the Pokémon Go phenomenon that has taken the world’s attention by storm. The release of the smash-hit app by Niantic Inc. has not only resulted in global hype, but has also had significant repercussions on the stock market. Shares of Nintendo, which has a small stake in Niantic and a 32% stake in The Pokémon Company (the company that owns the rights to the Pokémon franchise), have been on a rollercoaster ride and their average daily turnover on the Tokyo stock exchange has multiplied by a factor of 30 after the release of Pokémon Go. The share price more than doubled during the first few days, then plummeted after the company had to play down the financial impact of the game’s success.

Source: 123RF

Other stocks have also been impacted by Pokémon fever: McDonald’s Japan, which distributes Pokémon characters with its Happy Meals, jumped by 25% after the game’s release. First Baking, the baker of “Pokémon Bread”, saw its share price increase by 23% and Fuji Media Holdings, which owns a small stake in Niantic, was also up by more than 20%. Sanoyas Holdings, an engineering company whose leisure arm runs Pokémon themed facilities, saw its share price temporarily skyrocket by more than 300%, while shares of Imagica Robot, a producer of Pokémon cartoons, briefly gained almost 200%.

Share prices of Nintendo, Sanoyas and Imagica Robot (ytd)

Source: Bloomberg

While the jury is still out on the potential impact of the game’s success and the Pokémon craze on the financial results of these companies, it is clear that riding these kinds of waves on the stock market means taking big risks. Getting the right timing for such investments (“bets” would probably be a more appropriate term) can turn out to be very frustrating, as short-term news flows result in big market swings. Often investments made during these volatile times are merely speculation on short-term trading gains and are rarely made for the purpose of establishing long-term holdings. As such, company valuations tend to be ignored and prices paid for the investments often prove to be too high over the long run.

Short-term investment themes on the Japanese stock market

Riding such thematic waves is a more common phenomenon on the Japanese stock market than other markets. After decades of disappointments, the mood of many investors has veered away from fundamental investing. Even after the nice rally we’ve enjoyed in the past three years, most global investors are underweight on Japan and shy away from long-term commitments. To gain exposure to the Japanese market, they tend to play certain themes for a while, without paying too much attention to company fundamentals or valuations. The recent Pokémon frenzy, although extreme, is just an example of many others in the past.

In 2003 for example, the SARS outbreak hit Asia and Japanese investors rushed to buy makers of masks and dumped travel-related stocks. In 2008, the spike in crude oil prices prompted investors to buy companies that were somehow connected to the theme of alternative energy. In 2012, the spread of smartphones and the proliferation of social games led to a strong rise in the share prices of game-related companies. In recent years, the rise in foreign tourists visiting Japan has increased demand for transportation and consumer stocks. Although some themes have influenced investor behaviour more than others, they have often resulted in big market swings and unfulfilled expectations.

At BLI – Banque de Luxembourg Investments, we are not trying to capture and ride these waves. Our investment approach leads us to buy companies which benefit from a competitive edge that allows them to create shareholder value over the long term

We also put a big emphasis on company valuation in order to avoid falling into the trap of overpaying for our investments. We do not base our investment decisions on short-term themes and tend to avoid over-hyped stocks that are buoyed by growth expectations that are not sustainable.

Thematic investments at BLI

However, while we don’t actively follow the trend on short-term themes, our individual investments often profit from certain interesting long-term trends:

For export-orientated companies, our Japanese equity fund BL-Equities Japan holds several companies that respond to the themes of industrial automation and the growth in mobile data communication. Industrial and chemical companies like Fanuc, Keyence or Nitto Denko, which have been described in detail in a previous blog entitled “Automation for the people”, are well positioned to benefit from these structural growth themes. Another long-term theme is the rapidly growing middle class in emerging countries, where companies like Pigeon, a leading producer of baby bottles and dummies , and Unicharm, Japan’s leading producer of baby nappies, are well positioned to benefit.

Among companies exposed to the domestic market, the fund’s portfolio includes several companies that are boosted by consolidation in Japan’s retail sector. Ain Holdings, ABC-Mart or Don Quijote are some of the retailers mentioned in an earlier blog entitled “New adventurers in retail”, which gain market share at the expense of smaller competitors. Demographic change is also an important theme in Japan. Secom for example, a virtual monopolist in security systems, benefits from the ageing population as it has expanded its product range to offer services for the elderly.

A key recurring theme on the Japanese stock market is the rotation between sectors more exposed to exports and those more exposed to the domestic economy. Investment switches between these segments are generally based on the outlook for the global economy and the Japanese yen. They can occur suddenly, continue over longer periods of time and heavily influence stock performance. As predicting parameters like currencies, economic data or investor sentiment influencing this sector rotation is very difficult, we have decided that our Japanese fund must always keep a sound balance between domestic and export-orientated companies. This decision is essentially a risk-control measure, as it prevents the fund from being too heavily exposed in either direction. It is the only top-down decision made for the portfolio, the choice of companies included in the two categories being purely based on bottom-up stock picking.


Themes and their impact on fund performance

Apart from this structural choice to balance export and domestic companies, fund performance over the short term can still be heavily impacted by many other themes that influence investor behaviour on the Japanese market. For example, in 2013, the main investment theme playing out in Japan was the monetary policy aspect of Abenomics, resulting in a depreciation of the yen and a decrease in investors’ risk aversion, as I noted in an earlier blog entitled “The impact of Abenomics“. Investors have consequently been on the hunt for high-beta and highly leveraged stocks, small caps, and stocks in sectors like brokerage or real estate. None of this played into our hand as our exposure to these categories is structurally low. As a result, BL-Equities Japan trailed the market during this period.

BL-Equities Japan vs. MSCI Japan NR since launch

Source: Bloomberg

Over the short term, it is always possible for performance to be negatively impacted by theme-driven markets but over the long term, we are convinced that stock markets reflect economic realities and that our approach consisting of buying quality companies at reasonable valuations pays. Since the beginning of 2014, BL-Equities Japan has been able to make up the ground lost in 2013, and since its inception in 2011 it has significantly outperformed the market.

Theme-driven markets can also play in your favour: for instance, during the last two years, the focus of Japanese investors has been on the theme of “improvements in corporate governance and shareholder returns”. I described the reasons for this trend in past year’s blog entitled “an Emerging Interest in Corporate Governance”. Profitable companies that generate large amounts of free cash flow have become the focus of investors’ interests and demand for quality growth stocks has increased. As these are the kind of companies that are the preferred investment candidates for BL-Equities Japan, this theme has certainly helped to contribute to the fund’s excellent performance during this period.

Theme-driven markets as opportunities for investors

As we have seen, in the short term, markets do not always reflect economic realities. On the one hand, stocks can fall out of favour for simply not being in tune with a certain theme, while on the other hand, markets can drive up stock prices purely based on short-term news flow and sentiment. At BLI, as fund managers with a long-term view, we try to use these market movements to our advantage. We can seize opportunities that arise when unloved companies with attractive and sustainable long-term growth prospects become cheap for the wrong reasons. And we can take profits on those popular companies in our portfolio whose valuations have been driven up too far, just because they were responding to a favourable theme. With this contrarian approach, investors might miss out on some short-term investment opportunities and sometimes be on the wrong side of the equation when certain themes play out. But over the long term, this approach should turn out to be reasonably rewarding for investors and help them register better and more sustainable returns than those achieved by following the herd in theme-driven markets.

Steve GlodEquity Fund Manager


Source : Banque of Luxembourg


Universal Press



After Brexit: losses in financial sector, safe havens benefit


Equity markets have reacted negatively to the UK’s vote in favour of exiting the European Union. The biggest loser was the financial sector, while defensive stocks like consumer staples and healthcare benefited from a withdrawal to quality, indicate Guy Wagner, Chief Investment Officer at Banque de Luxembourg, and his team, in their monthly analysis, ‘Highlights’.

Equity markets have reacted negatively to the UK’s vote in favour of exiting the European Union. However, after 2 days of losses, the markets stabilised in anticipation of support from the central banks, which are likely to step in to support the financial markets if the negative reaction persists. The biggest loser was the financial sector, while defensive stocks like consumer staples and healthcare benefited from a withdrawal to quality. “Although the Brexit vote has not triggered a general meltdown on the equity markets, it reflects a steady erosion of confidence in public institutions among a large segment of the population”, says Guy Wagner, Chief Investment Officer at Banque de Luxembourg and managing director of the asset management company BLI – Banque de Luxembourg Investments. “If this loss of confidence extends to the central banks, equity markets could correct sharply. Between now and then, given the lack of alternatives, equities could continue to rise despite there being no sign of any improvement in economic fundamentals.” And he continues: “In an environment characterised by prolonged uncertainty, investors usually value quality and visibility. Within equity markets, these attributes are generally not found within sectors that are very cyclical or within the financial sector.”

Federal Reserve and ECB do not change their monetary policy

At the FOMC (the Federal Reserve’s monetary policy committee) meeting in June which took place just a few days before the Brexit referendum, Chairman Janet Yellen left interest rates unchanged given that a vote in favour of the UK’s exit from the European Union could have unfavourable economic and financial consequences worldwide. In Europe, the European Central Bank (ECB) did not react to the result of the British poll. It is continuing to execute its planned programme of buying up debt securities from corporate and public issuers in the eurozone. The Bank of England announced its intention of easing monetary policy during the summer to offset the unfavourable economic and financial effects of the British referendum.

Global economy is continuing to generate stable, moderate growth

In the meantime, the global economy is continuing to generate stable, moderate growth. “In the United States, the economy is being driven by domestic consumption, while corporate investment is weak”, underlines the Luxembourgish economist. In Europe, political uncertainties have not so far led to an economic slowdown; growth is weak but positive. In Japan, the government is delaying the implementation of further stimulus measures despite ongoing economic stagnation. “In China, fiscal stimulus is cushioning the economic slowdown at the cost of adding to the country’s debt.”

Government bonds are playing their role of safe haven despite the weak yields on offer

Bond yields continued to decline in June. Over the month, the 10-year government bond yield dropped in Germany, in Italy, in Spain, and in the United States. Guy Wagner: “With growing political uncertainty, government bonds are playing their role of safe haven despite the weak yields on offer.” Even negative yields do not seem to be putting investors off maintaining or increasing their positions. “As the probability of monetary tightening in the United States is now diminishing, the US yield curve should continue to flatten.”

Source  Banque de Luxembourg Investments


Universal Press


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