Eccoama special edition recorded at the Exan economic meetings in Provence, 26th edition. Borama, as every year, is a partner of this essential event. Your guest now is Stéphane Boujnah from Euronext. Hello.
Always a pleasure to have you.
Well, the pleasure is mutual.
Now, we need to talk about what's happening in the economic world and on the markets. European stock markets, and American ones too, are up almost 10% since the start of the year. Oil is barely at $70 today. Despite all the chaos of the first half, the war in Iran, the stock markets are ultimately doing well. It wasn't written in the cards.
No, but the reasons for this are multiple. First, you must never lose sight that stock markets reflect the performance or performance expectations of large companies, mostly the largest ones, and do not reflect the performance of an entire economy. So what we saw during the greatest difficulties of the Iranian crisis, when hydrocarbon prices rose sharply, was that large companies, apart from a few very specific sectors, were not really affected in their valuation, while there was a feeling of crisis discomfort in many SMEs and sectors. Simply because small companies are not listed, SMEs, mid-sized companies, ETIs are not listed, so their difficulties are not reflected by the stock market. So there is first a perception bias: when we talk about markets, we talk about stock markets and listed companies, but on stock markets we talk about larger companies. The second thing that happened and explains this performance is that the results published by companies in the first half were quite good or very good. The third thing is that there was a consensus in the markets that this war, this conflict, is fairly contained geographically and probably contained in time. The consensus was that it wouldn't last very long, it would calm down, it wouldn't drag on. After all, only 5% of world trade passes through the Strait of Hormuz. Yes, 20% of hydrocarbons, yes, that's significant, but there was no feeling of something systemic and dramatic like Covid. And then the other thing is that Europe and the United States were less affected than Asia. So in Asia the debate is more nuanced because there was a greater impact from the rise in hydrocarbon prices. So for all these reasons, we find ourselves in a situation where the CAC has risen to around over 8003, whereas recall, and this is exactly the analysis you were making in January 2020 before Covid, before the war in Ukraine, before inflation, before the energy crisis, before Iran, the CAC 40 was around 6000 points, and we have gone from 6000 to 8400 points despite all these events. So there is an excellent performance of global companies.
Why is the CAC lagging behind its European peers? I'm not even talking about the US. No, but I won't draw excessive conclusions from that. We need to look at sectoral performances. There is a correction in luxury in particular, given what I indicated a few moments ago. On one hand, the stronger effects of the Iran crisis on Asian markets, and on the other hand, the slowdown or deceleration in China. So when you look at the details sector by sector, you also have sectors that have performed remarkably, notably aerospace and defense, where there are very good listed companies in France that are progressing more than their American counterparts.
Yeah. Since we're talking about Americans, Stéphane Boujnah, what about SpaceX? Does it make you dream? We'd like to have a SpaceX in Europe, wouldn't we?
No, of course we would like to have companies that bring rockets back and provide internet with great resilience all over the planet. But it's a group that doesn't make money; its main activity, Starlink satellites, is profitable, but it's a bet on future promises. There has been a fairly significant correction after the IPO, and as you said, it has recovered a bit.
It remains a buy operation. I mean, you haven't bought any SpaceX, have you?
First, I don't buy stocks directly, but if I could, I wouldn't have bought for those reasons because I only buy shares of companies that generate profits. And when I can buy shares, it's when I buy shares of private companies. But I can, as we can't have heavyweights listing, but we do have heavyweights listing. Really very heavy, like raising $80 billion as SpaceX.
Maybe not $80 billion because that's very exceptional, even in the US. That's true, even in the US, but on Euronext markets in recent weeks, what have we had? We had that aerospace and defense company, a Czechoslovak group now called CSG, which listed with a valuation of around €25 billion. That's considerable. There was also an operation in aerospace and defense with Kongsberg Maritime, and KNDS is postponing its IPO.
Yes, but that's because last week there was some volatility on one of KNDS's German peers following a decision by the German government that the markets felt would impact that peer more, so there was a small flat spot in defense sector valuations in Germany. So I don't know if it's postponed, but there is a pause in the process while markets stabilize.
I'm not worried about that. It's a magnificent company that absolutely has its place on the Paris and Frankfurt stock exchanges.
2026 will be a better year for IPOs in Europe.
I think, I think what we've seen over the past six months is still quite a weak link in terms of IPOs in Europe. We still compare ourselves to the US.
With Euronext, you must never forget that there is a very big difference between shallow, small markets like the Swiss market, the German market, the British market, and the Euronext market, which today is almost €7 trillion in aggregate market capitalization, with about €13 to €15 billion in daily volume. Compare that to the London equity market, which is three times smaller in volume. So today, liquidity in Europe is on the Euronext market, and that's why we attract a disproportionate share of significant IPOs. So I am not at all worried about the momentum for 2026.
