Global crises such as the Ukraine conflict or the Covid lockdowns in China have clearly left their mark on the capital markets. Global stock market indices have fallen by up to a third. Even bonds, which are actually supposed to be a safe haven, have in many cases seen double-digit percentage losses.
The central banks were slow to react to rising inflation rates. They are now forced to raise interest rates all the more aggressively to prevent a consolidation of inflation rates. Bonds in the portfolio that were purchased when interest rates were low have now become unattractive compared to new higher-interest bond issues, with the inevitable associated losses.
WIRTGEN INVEST Holding GmbH has not completely escaped this turbulence in the markets. Very few shares or investments offered protection against the price slump. Only certain commodities such as gold performed well and were therefore able to cushion the impact of losses. For us, these hedging positions represent an important portfolio stabilisation element – one we had been continuously consolidating in recent years.
The economic outlook remains very gloomy. However, market volatility will present multiple opportunities in the coming months, which we want to harness as much as possible. We have already built up a decent liquidity buffer to enable us to act quickly and effectively. At the same time, our main focus continues to be on long-term involvement in quality enterprises. Our partners in the financial sector provide us with assistance in finding and acquiring these shareholdings. As an independent and financially strong family office, we thus retain a positive long-term outlook despite the turbulence in the markets.
he central banks were slow to react to rising inflation rates. They are now forced to raise interest rates all the more aggressively to prevent a consolidation of inflation rates.