Press Release 03/2020

Joint Press Release – For immediate release
March 27, 2020  –   4 min read

Photonike Capital SA – Nucleus Holding II SCS:
new acquisitions and effect of Coronavirus

 

Photonike Capital SA (Euronext Access Symbol: MLPHO – Brussels) and Nucleus Holding II SCS (Luxembourg) announced today that they have enlarged the Joint Venture agreement signed on

November 2019.

 

The purpose is to put beside Nucleus Life AG, a life office in operation since 2006, the life insurance company TriCap Assurance SPC in operation since 2007 in the B2B Life Insurance market, exclusively offering “contrats dédiés” (wrappers) to High Net Worth Individuals.

 

The total investment of 10 million euros for the Project is fully financed by Photonike Capital SA using its own resources.

 

The consideration paid includes the possibility of converting the investment into shares of the various investments.

 

Thanks to the new acquisition the group reach over 1,3 billion Euro AUM and a several highly

experienced managers joints the Nucleus family.

 

The joint venture will focus on both top ten worldwide life insurance markets, offering to mass affluent and upper mass affluent customers a suite of innovative unit linked products to meet the investment diversification needs arising from a context of low interest rates.

 

As the World life insurance market is reaching an unprecedented turning point due to the most severe crisis the world has experienced, Photonike Capital SA and Nucleus Holding II SCS are willing to promote new business opportunities in conjunction with an existing distribution network of over 70 brokers and financial advisors and to add over 1,4 billion Euro AUM at the end of the fourth year to the current activities of the group.

 

Fausto M. Ventriglia, president and founder of Photonike Capital SA said that “in Italy, the distribution remains confident in the future, and the Agreement also provides that the distribution will be enforced with the implementation of DLT (Distributed Ledger Technology)/Crypted IT platform for remote subscription and long-term conservation of the contracts”.

 

Vincent Derudder, CEO of Nucleus Holding II SCS expressed “great satisfaction with the agreement

because it allows strong industry, product design and distribution synergies in the coverage of the

insurance risk”.

 

Both also praised the excellent experience and ability of the managers involved in the project supported by the positive message received from the representatives of the industry such as David Charlet, Chairman of FECIF, the 300,000-strong intermediaries trade association stating that “we will all need to be adaptable, resolute, and particularly conscious of society and others, not just ourselves. Focusing on “us” and “we” rather than “I” and “me” is imperative”.

 

Photonike Capital SA (Belgium) and Nucleus Holding II SCS (Luxembourg) inform that the operational activities of Nucleus Life AG have not been slowed down by the Coronavirus epidemic. The company provided for IT infrastructure dedicated to financial advisors and customers, with specific webinars on the products offered with more then 100 participants per time. Thanks to the organization, support is provided to producers and policy subscriptions have not undergone substantial slowdowns.

 

More details:

Madelaine Hellemans

mjh@nucleus.lu

 

Claude Chapelnote

info@photonike.com

 

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by Vincent WEGHSTEEN
August 1st, 2020 –   4 min read

Global Stocks and the Economy

The news continues to be overwhelming and devastating. Deaths from Covid-19 in the United States have moved above the 135.000 people, nearly 50 million Americans have filed for unemployment insurance and the country is in state of grief and rage over racial injustice. It’s getting easier to understand the skepticism associated with the perceived disconnect between real life pains on Main Street and the resilience of Wall Street.

The economy entered a recession in February and it dropped 5% in the first quarter. Industrial production and retail sales had the worst drops in 101 and 73 years, respectively. Unemployment is at levels not seen since the Great Depression when unemployment reached 26%.

It’s expected to stay high. If so, it will reinforce that we are indeed in a depression or headed for one. This has resulted in unprecedented money creation. In fact, the Fed’s balance sheet is now at a new record high of USD 7 trillion. This is an increase, which is already three times larger than the rise following the 2008 financial crisis. This in turn, will likely fuel inflation, sooner or later, probably following the recession. Some are calling for stagflation (slow economy and inflation). But whatever the outcome, the soaring cost of food to the highest levels in 46 years could be a sign of things to come.

For many years the US has depended on foreign investors to finance their deficit spending by buying US governments bonds, but now , with higher tensions, they have been selling their bonds by the most this century. This goes for China and Saudi Arabia to name just a few. This means, the Fed’s going to have to raise interest rates to attract foreign buyers back to the fold. And if inflation perks up downstream, this will only add fuel to the fire because interest rates and inflation tend to rise together.

So , where are the stock markets going?

Monetary and fiscal stimulus, and more recently news on virus treatments/vaccines, have fueled an epic run up from the lows. Ultimately though, equity prices depend on economic conditions and corporate earnings. There is the risk that the stock market is not accurately reflecting second-order and longer-term economic impacts of the virus and attendant economic shutdown (including bankruptcies and temporary layoffs becoming permanent job losses). There is also a risk that the stock market is not accurately reflecting the weakness yet to be fully felt in corporate earnings.

That said, it’s always wise to heed the market’s messages. Fiscal and monetary support has been unpredecented and could ultimately overcome the damage to the economy. Our advice to investors trying to navigate these uncertain waters has been consistent this year: rely on tried-and-true disciplines like diversification and regular rebalancing. Keys to long-term investment success do not rely on the precise timing of market tops and bottoms. Investing is , and always has been, a process over time. It should never be about moments in time.

Stay tuned!

Vincent Weghsteen

Analyst Nucleus Group

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January 13th, 2021  –   4 min read

GLOBAL MARKET REVIEW 2021

2020 has been difficult in many ways, involving health scares, lifestyle changes and sadness for too many people. 

But in one important way, however, 2020 has been a good year with a powerful rally for US stocks, less for European stocks that were rather mixed.

Gold and the Metals sector have been the big winners with a return of 35% for Gold and 62% for Silver.  Commodities blossomed with a return of 26% for Copper, but the USD was one of the only losers.

The stock market has done well with the Nasdaq up 38%, the S&P500 up 14% and the Dow Industrials up 4,50%.

Most of the stock indexes hit new record highs and all signals are pointing to higher stocks, at least in the months ahead and probably longer. So despite  the big divergence between Wall Street and Main Street, it looks like the Fed’s super easy money policies will continue to push stocks even higher.

What are the biggest potential downside risks for investors in the year ahead?  While none of these scenarios make our base case for 2021, a review of the top investment risks in greater depth may be prudent as we enter the New Year.

The top 5 five downside risks for investors in 2021 are:
•    Problems with the vaccine rollout
•    Geopolitical and trade tensions do not fade
•    Fiscal and /or monetary tightening
•    A zombie economy
•    Interest rate/dollar shock

With the vaccine rollout, the markets has high hopes for a successful and on schedule rollout of the Covid-19 vaccines globally, anticipating a majority of people having been immunized by July.  If delays comes around we could be in for a stock market pullback.

Geopolitically, there are mid-year presidential elections in Iran where we could see a hardline conservative come to power, hampering any US attempt to return to the Joint Comprehensive Plan of Action to contrain Iran’s nuclear ambitions. President elect Biden has made it clear he won’t be easing trade tariffs immediately and intends to confront China on environmental and labour issues in addition to intellectual property.  We can also expect renewed tensions between North Korea, Russia/Syria, Venezuela and others with interests in conflict with US goals.

Premature monetary or fiscal policy tightening in major economies could slow the recovery and deal a setback to the stock market.  This is what happened when the global economy emerged from the last recession in 2010 and 2011.

Lingering structural economic impacts from the 2020 crisis and recession could slow the economic rebound. Instead of a quick return to the pre-crisis economy, it is possible we may need a longer period of structural adjustment. Continued easy fiscal and monetary policy could also result in a drag on productivity and growth from the hordes of “zombie” companies. About 20% of US and non-US companies are considered “zombies”, defined as those with income insufficient to cover debt payments. These companies are being kept artificially alive with government aid.

Last, an unexpected jump in inflation, surprise surge in bond yields or plunge in the dollar might lead to higher stock market volatility. Don’t forget that inflation expectations have been rising fast the last couple of months.

 What are the markets telling us?

The market broke out to new record highs, signalling higher highs ahead.  Note that all of the stock indexes are clearly bullish, well above their 65 week moving averages.

Plus the fact that they are all at new record highs reinforces solid renewed strength across the board that will likely continue.

Ok, but what about the wide divergence between Wall Street and Main Street, the vulnerable economy, the new record Covid highs, business closing, many unemployed and so on?

While this is all true and the disconnect continues, there are two things we have to remember that were strongly reinforced this past month…

First, easy money has overpowered everything else. It’s been driving the market higher.  That’s what the market’s focused on and it’s thriving in this environment.  We have so much debt now, the markets are in such a massive bubble that the Fed would not dare risk pricking it. The Fed is not going to take away the “punch bowl”. (Peter Schiff)

Second, the vaccine news has also fueled optimism.  Keep in mind, the stock market always look ahead.  So perhaps it sees better times coming, say six months down the road.  This in turn is also helping to boost stocks higher.

Basically, all foreign markets are generally rising for the same reasons as the US market.  They like the stimulus, they are optimistic about the vaccines and they are happy the political situation has settled down.  Do not forget,  the markets like stability and here too, they seem to be looking ahead. 

So in conclusion:  Focus on time in the market – DO NOT TRY TO TIME THE MARKET

Vincent Weghsteen

Analyst Nucleus Group

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