Lvmh has been there since yesterday new queen of the European Stock Exchanges. The colossus led by Bernard Arnault has conquered the first position in the European stock exchanges surpassing Nestlè: the luxury giant capitalizes 271 billion euros against the 264 billion of the Swiss multinational or, for example, the 42 billion of Stellantis. An exceptional result, which makes the luxury flagship, with its 76 brands, now represent approximately 15% of the value of the entire Paris stock exchange, four times what it was worth ten years ago, when the sector represented only 4% of the Cac 40 index, behind Total, utilities and big banks.
But the French giant, which finally landed in the United States with the conquest of Tiffany, is relatively independent of the performance of the Hexagon economy, as demonstrated by the performance of the stock since 2015. In this period, under the impetus of large international investors, Lvmh share is up 270% against 22% of the index. It is the confirmation that in the eyes of financial operators, the European luxury industry covers a function similar to that performed overseas by the champions of the digital economy, deserving of new economy multiples.
A bubble? Perhaps but, as happens for the big names in Silicon Valley, the sector proves to be much more robust and impervious to the difficulties of the rest of the real economy: in 2020, the year of the lockdowns that have bent the travel industry as well as major riots in luxury streets in Paris or Hong Kong, Lvmh stocks scored an increase of 23% against 7% of the list, despite the difficulties that accompanied the troubled acquisition of Tiffany that Arnault, not surprisingly defined as the vope of luxury, managed to win with a discount compared to the agreed price.
but fromstart 2021, the luxury leader was among the quickest to take advantage of the bull rally despite the difficulties in the world of consumption. However, he played in favor of Arnault's brands the expansion of China, the main client of the luxury empire, so that the primacy of Lvmh on the eve of the Chinese Lunar New Year, traditionally the shopping season, assumes a symbolic value. Of course, this year and restrictions due to the pandemic will reduce the flow of travel within the Celestial Empire while holidays in Europe are practically eliminated. But the big names in luxury, starting with Lvmh, ran for cover in time, reinforcing their already formidable presence on the Asian market, which is in any case experiencing a great recovery. Confirmation has already arrivedthe front of the diamonds where sales in Asia in the fourth quarter rose by around 20% and the prospects, according to Bain & Company, speak of a growing market of up to 64 billion dollars. In short, there are the premises for a golden season, as anticipated by the rush of the Chinese stock markets before the holidays.
Year to date the MSCI Asia-Pacific Stock Exchange Index gains 9,40% and clearly outperforms both Wall Street (S&P500 +4,90%) and the Eurozone (Eurostoxx +3,20%): albeit slightly, the dragon rally even surpasses the Drahi effect .
In fact, the Chinese stock exchanges have had the lion's share in the last few sessions. The CSI300 index of the Shanghai and Shenzen stock exchanges today gained 2,2% and reached a 13-year high on the last business day before the long holidays of the Lunar New Year. And it will certainly benefit from it monsieur Arnault, master of luxury and handbags.
