Close menu

September 18th, 2023 | 07:40 CEST

Deutsche Bank, Globex Mining, Vonovia - What are the consequences of the ECB's latest interest rate hike?

  • Mining
  • Gold
  • Investments
  • RealEstate
Photo credits:

After a long period of zero interest rate policy, the ECB is stepping up the fight against inflation and last week raised interest rates for the 10th time in a row. The effects are very different. For banks, on the one hand, profit may increase via higher interest rates, but it may also decrease if fewer loans can be made. For commodities, the rise in interest rates in Europe could lead to a stronger US dollar. However, this is rather unlikely, as interest rates in the US are still higher. For the real estate sector, rising interest rates are poison. Loans are becoming more expensive, and thus, demand for real estate is falling. Today, we look at one company from each sector.

time to read: 5 minutes | Author: Armin Schulz

Table of contents:

    Jared Scharf, CEO, Desert Gold Ventures Inc.
    "[...] Our SMSZ project is the largest contiguous land package of any exploration company in the region at 400km2 and overlays a 38km portion of the prolific Senegal Mali Shear Zone. [...]" Jared Scharf, CEO, Desert Gold Ventures Inc.

    Full interview


    Deutsche Bank - Light and Shadow

    Looking at the first half of the year for Deutsche Bank, the respective quarterly numbers were more than decent, and one would not think that Deutsche Bank is among the underperformers in the banking sector. This is due, among other things, to the banking quake to which Credit Suisse, for example, fell victim. When the bank's credit default swap rates shot up, fears spread that Deutsche Bank might also be in trouble. That was not the case, but there has recently been negative news again.

    Above all, there are IT problems in the private customer area with the customers of Postbank and likely also DSL Bank. The migration is going anything but smoothly. Following various customer complaints, BaFin has now intervened and thus increased the pressure on the Group. A piece of positive news from the end of last week could impact the share, as it was announced that Deutsche Bank, in collaboration with the Swiss crypto company Taurus, intends to offer institutional customers Bitcoin custody and trading services. This would open up a new business area for the bank.

    Compared to its European peers, Deutsche Bank is currently characterized by attractive valuation ratios. On the one hand, there is the price-earnings ratio (P/E) of below 5 and, on the other hand, the price-book ratio of 0.3. Competitors are currently trading at completely different valuations. Accordingly, the Deutsche Bank share, which is currently trading at EUR 10.25, has a lot of catch-up potential. Last week, JPMorgan set the price target at EUR 14 and issued a "Buy" recommendation.

    Globex Mining - Clearly undervalued

    The hunger for raw materials is increasing worldwide, and especially critical raw materials are now highly competitive. Lithium, for example, is urgently needed for electromobility. Rare earths, for which China has tightened export conditions, could run out for Western countries, although some technologies rely on them. Investors who want to invest in these critical commodities can buy individual companies or turn to ETFs. Another option is Globex Mining (GMX) of Canada, which has over 232 projects in various metal categories, including precious metals, base metals, and specialty metals. It has nearly all critical commodities in its portfolio.

    55 of the properties have historic or NI 43-101 compliant resources. Development of the projects is undertaken by other companies who are required to invest a certain amount in the project, and in return, GMX receives royalties, options, cash payments or shares. Most properties are located in North America, except for the Bräunsdorf Silver Project in Germany. There, there was an update by partner Excellon Resources. All terms of the agreement have been met, making the project GMX's 91st licensed property. The Company will receive a 3.5% gross metal royalty on precious metals and 2.5% on all other metals after production starts unless Excellon takes the option to reduce the percentages by 1% against a payment of CAD 1.5 million.

    Due to the large number of projects and partners, a constant news flow is guaranteed. On September 8, Brunswick Exploration started its 5,000 m drill program at the Lac Escale Lithium Project. Partner Emperor Metals drilling has uncovered gold grades up to 5.6 g/t at GMX's Duquesne West property. For the Chibougamau project, GMX receives a 2% gross metal royalty from TomaGold for the West Block properties. This is in addition to an LOI for the East Block. At the Crater Lake Scandium rare earth property, Imperial Mining increased the estimated mineral resource to 27.7 million tonnes, representing a mine life of approximately 40 years. With all the good news, it is surprising that GMX's stock is significantly undervalued. At a current price of CAD 0.79, the Company has a market capitalization of just around CAD 44 million.

    Vonovia - A bargain despite high debt?

    For Vonvia, a suspension of the interest rate hike last week would have been a very positive sign, but as we know, things turned out differently. The first months of 2023 were difficult for the real estate group, but since the end of March, things have been looking up on the stock market. The group's Achilles heel is its high debt. But when the figures for the 2nd quarter were announced, it was already announced that all refinancing until the end of 2024 is covered. The vacancy rate of only 2.2% of the total portfolio is also a good figure. EBITDA of EUR 619 million was up 10.3% year-on-year.

    Taking the net asset value calculated by the European Public Real Estate Association as a benchmark, which was EUR 49.67 at the end of the half-year, the share is undervalued. The sale of apartments to Apollo and CBRE has given the Company breathing space. The Group is also striving to cut costs in other areas. In Berlin, a pilot project is underway with decarbon1ze and the electricity transmission grid operator 50Hertz. This project aims to utilize surplus renewable energy within the building to reduce energy costs.

    A remote monitoring system has been installed in around 3,500 elevators to prevent breakdowns based on data transmitted by Senorik boxes. Vonovia has taken over the solution provider, Dr. Schönberger GmbH, and intends to enable other customers to purchase it as well, thus generating another source of revenue. Since the beginning of August, there has been a flurry of buy recommendations. In September, Deutsche Bank and Warburg Research reiterated this, with short targets of between EUR 27.00 and EUR 39.80. The share closed negatively after the interest rate hike on Friday and exited Xetra trading at EUR 23.52.

    The ECB's interest rate move was not entirely unexpected and is unlikely to majorly impact the three companies featured here. Deutsche Bank should solve its IT problems as soon as possible so that DSL and Postbank customers no longer have problems. Operationally, they are on a good path. Globex Mining has many projects that generate royalties at the start of production. Its broad portfolio means it invests in many different commodities. The undervaluation is obvious, especially since the Company also has a share buyback program in place. Vonovia has got refinancing under wraps by the end of 2024. The operating figures are convincing. The share seems undervalued, but the high debt should always be considered.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.

    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

    Related comments:

    Commented by Stefan Feulner on April 15th, 2024 | 06:45 CEST

    First Majestic Silver, Desert Gold, Albemarle - Escalation paves the way

    • Mining
    • Gold
    • Silver
    • chemicals
    • Lithium

    The events at the weekend, during which Iran carried out a massive airstrike on Israel for the first time, are likely to have escalated the already troubled geopolitics to a new level. It is not yet known whether Israel is planning a counter-attack. Precious metals gold and silver are once again likely to benefit from the uncertainties following the rather weak close to the week. The yellow precious metal could recapture the USD 2,400 per ounce mark, which could also boost the shares of producers and gold exploration companies.


    Commented by André Will-Laudien on April 15th, 2024 | 06:30 CEST

    Threat to Europe, Demand for Defense Persists! Rheinmetall, Almonty Industries, Renk and Hensoldt

    • Mining
    • Tungsten
    • armaments
    • Defense

    Europe is gearing up, as since February 24, 2022, peace has become a thing of the past. Europe lived in harmony for a whole 77 years, with the exception of the warlike dissolution of Yugoslavia as a regional conflict. Today's world resembles the situation in the 1970s and 1980s, as the Iron Curtain is re-establishing itself as a political border. The old world order that has prevailed since the end of the Cold War has been shattered by Russia's invasion of Ukraine. Consequently, NATO has regained a new role; after years of disarmament, it has now become a sought-after defense alliance. The accession of Finland and Sweden now strengthens the alliance towards the east. What now looms large is rapid rearmament! Where can investors still participate?


    Commented by Fabian Lorenz on April 11th, 2024 | 07:30 CEST

    Panic at AIXTRON and NEL! Is Kraken Energy an AI beneficiary?

    • Mining
    • Uranium
    • nuclear
    • renewableenergies
    • AI

    AIXTRON shares lost more than 5% yesterday. In addition to the price slide on the NASDAQ, a negative analyst comment added to the negative sentiment. Both the rating and target price of the AIXTRON share were significantly reduced. The same applies to Nel. The hydrogen specialist's recovery attempt was mercilessly stifled, and the share lost over 15%. The lack of incoming orders, in particular, is making analysts nervous. In contrast, Kraken Energy could soon be seen as an AI beneficiary. After all, Elon Musk is not the only one warning of an energy crisis and calling for the expansion of nuclear energy. Voices are getting louder that the computing power required for artificial intelligence will cause energy consumption to explode. In order to prevent a blackout, many countries are turning to nuclear power.