European Opportunities Trust PLC has published a new fact sheet on its website, providing details of portfolio holdings and past performance statistics as of the end of October. The European economy is experiencing a slowdown, particularly in Germany, with companies reporting weak demand in various sectors such as crop protection, industrial specialties, food ingredients, 5G, luxury goods, and electric vehicles (EVs). EV demand has weakened in Germany and China, leading to a lower global EV penetration forecast for 2024. Industrial activity in China is also weaker, and the Eurozone manufacturing Purchasing Managers Index contracted in September and October.
European equity sentiment remains poor, and earnings expectations for European companies are decreasing. The threat of new government taxes is intensifying, with France proposing to tax businesses and activities to accelerate the green transition, and Norway imposing more taxes on businesses.
Several investee companies of European Opportunities Trust PLC reported positive results. Deutsche Boerse saw a rise in revenues and profits in the third quarter and increased its outlook for 2023. Nestes reported profits from renewables products ahead of expectations. Infineon expressed confidence in its auto-related activities, and Prysmian CMD provided reassurance.
Dassault Systèmes was the biggest contributor to performance in October, with excellent third-quarter results and confidence in near-term growth rates. Novo Nordisk also performed well, driven by high demand for its diabetes and weight reducing drugs. RELX shares continued to advance, and GTT saw strong third-quarter revenues. Genus expressed confidence in its gene editing program, and BioMérieux announced its decision to buy a stake in Oxford Nanopore for real-time analysis of DNA/RNA sequencing technology.
The biggest detractor in October was Edenred, despite delivering excellent results, as the French government announced its intention to intervene in the specific-purpose payment market in France, potentially damaging Edenred's business.