Has interest rate development reached its peak? That is a prediction APs chief economist Thijs Knaap does not want to make. As long as inflation is high, you will also see high interest rates. In terms of macroeconomic growth, however, things are against us, and when growth declines, interest rates often decline with it. So those two factors work against each other. Which one is stronger remains to be seen, Knaap thinks.
Other topics discussed during BNR Nieuwsradio’s investor panel included the decision by flash trading company Flow Traders to legally establish itself in Bermuda and the reorganization of Philips, which is cutting 4,000 jobs, including 400 forced layoffs in the Netherlands. The company is under pressure, due to a costly recall of its sleep apnea devices, but says it is also suffering from macro-economic developments.
Canary
Knaap: “We know that at some point, macroeconomic problems are going to affect corporate profits. So, the question is: Is Philips the proverbial canary in the coal mine? If you look more broadly at companies’ third-quarter results, you see that while sales are still rising, profits are falling, due to rising prices. This is especially true in Europe, and the decline is stronger than expected.”
As usual, the panelists were also asked about a recent investment transaction. Knaap: “We recently acquired a 49 percent stake on behalf of ABP in Gemini, a solar power project currently under development near Las Vegas. The project will provide energy for more than 400,000 households at peak times.”