Probeleggen is marketing BNP Paribas' Rendement Certificaat Aperam to investors in the Netherlands. The certificate, which is listed at Euronext Amsterdam, is linked to the shares of Aperam, a producer of stainless steel with 2.5mt of flat capacity in Europe and Brazil. The company is also the producer of speciality products, including electrical steel and nickel alloys.
"Investing starts with a vision, but the result is also determined, to a significant extent, by the interpretation," said Jim Tehupuring (pictured), co-founder and owner of the Dutch retail investor platform. By investing in the certificate, investors could achieve a 16% return in four months, according to Tehupuring. "That will be the case if the Aperam share does not trade below €37.50 between now and December 15, 2017. In the middle of August, the share was trading at around €42.00 and, as long as it does not fall by more than 10.7%, investors could achieve a nice return."
If the share breaches the €37.50 barrier, investors will not get a bonus coupon, but instead a return equal to the share's final level on December 15. "What is important is that you have a vision that Aperam does not lose more than 10% in the coming four months," said Tehupuring. The last time Aperam traded at €37.50 was in August 2016, according to Tehupuring.
Compared to 2016, the level of the share is little changed, while the local AMX stock market index has increased by 17%, according to Tehupuring. Subsequent to the publication of healthy results based on improving market conditions in Europe, the level of the share, at €51.43, reached an all-time high on February 13, 2017. "Aperam produced two million tons of steel in 2016, which earned the company $2.75 per share," said Tehupuring. "The debt position decreased to $154m and Aperam has applied its strengthened financial balance to increase the dividend per share from $1.25 to $1.50 and spent $100m on buying back its own shares."
However, the price of the share has come under pressure in recent months due to the delayed recovery of the steel sector, according to Tehupuring. "In China, there is enough iron ore to meet domestic demand, while the pressure on the price of nickel is also high, due to the political climate in Indonesia and the Philippines," said Tehupuring. "Both countries have large stocks of nickel, which is an essential commodity for the production of stainless steel, and the price of nickel is passed on in the selling price by Aperam. As soon as the price of nickel decreases, clients delay new orders because they hope the price will fall even further."
In addition to his activities at Probeleggen, Tehupuring is the owner of fund manager 1Vermogensbeheer, where he specialises in the selection of AEX and AMX shares and options.
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