February 2026

Canary in the Coalmine

In February, one theme dominated our conversations with management teams: European carbon policy is under serious pressure - and the market is starting to reprice.

A combination of political newsflow and intensifying CEO lobbying has raised the genuine prospect of a structural shift in the EU Emissions Trading System (ETS). This matters for a number of industrial stocks that have been priced, in part, on assumptions about tightening carbon credit costs.

What we heard and saw

• Chemical CEOs are increasingly vocal. Across multiple conversations during the month, the message was consistent: European industry is losing competitiveness, and carbon costs are a meaningful part of the problem. The chemicals sector in particular has been squeezed by structurally high production costs relative to China, and patience is running thin.
  

• Political momentum is building. The EU Commission has signalled it may extend free emissions allowances for industry beyond current timelines. Italy has gone further, calling for an outright suspension of the ETS pending a broader overhaul. These are not fringe positions.
  

• Industry is coordinating. The Antwerp Declaration and a series of high-profile public interventions - including from Sir Jim Ratcliffe of INEOS - reflect a level of CEO-level lobbying that feels qualitatively different to prior years.
  

The IAA: a step, but not enough

Last month, the EU Commission published the Industrial Accelerator Act (IAA) - a measure aimed at accelerating industrial decarbonisation while strengthening the competitiveness of strategic sectors. Steel, cement, aluminium, cars and net-zero technologies were named as priority sectors, with chemicals noted as a potential addition.

Our read: the IAA is directionally positive, but the chemicals sector remains underserved. Cefic, the European Chemical Industry Council, has noted that "more is needed" - specifically, that chemicals should be fully in scope and benefit from stronger demand-side support. We agree. With EU energy prices rising again and the sector's cost disadvantage on global curves widening, more tangible measures are required.

The market read-through

February saw a rotation out of Heavyside names - notably cement - that had been assumed beneficiaries of tighter carbon pricing. If the ETS framework is materially softened, that structural tailwind weakens. Conversely, energy-intensive industries that have been penalised by high carbon costs could see meaningful relief.

We are watching this carefully. The direction of travel appears to be shifting, and we believe the repricing is still in its early stages.

Mid Cap of the Month - Kingspan

This month we're highlighting Kingspan, an Irish-listed global manufacturer and distributor of building materials, with market-leading positions in advanced insulation solutions for roofs, walls and floors.

Why Kingspan is interesting 

Kingspan's core products deliver substantial energy savings for buildings - a structural growth driver that operates well above underlying construction market growth rates. A strong track record of product innovation and disciplined geographic expansion has enabled consistent market share gains, and we see no reason for this to slow.

We believe Kingspan's growth profile is materially underappreciated both in sell-side estimates and in the current valuation. Several factors reinforce our conviction:

1. Data centre infrastructure 

   Kingspan is a world leader in critical bespoke infrastructure solutions for data centres - a market with a long and highly visible demand runway. This is an increasingly significant and differentiated part of the business.
   

2. Energy price tailwind 

   With EU energy prices rising sharply again - in part reflecting the ongoing impact of the Israel/US conflict with Iran - the case for energy-efficient building solutions strengthens. Kingspan's products directly reduce energy costs, and sustained high prices should accelerate customer decision-making.
   

3. Exceptional management 

   The management team is experienced, operationally impressive and meaningfully aligned with shareholders. This alignment has historically translated into disciplined capital allocation and a strong long-term track record.
   

4. Balance sheet optionality 

   Kingspan carries an under-levered balance sheet, providing real flexibility on capital deployment. Whether through value-accretive M&A - consistent with its historical playbook - or share buybacks, there are credible paths to enhancing shareholder returns from here.
   

The setup 

In our view this is a high-quality compounder, with structural growth drivers, a near-term energy price catalyst, and a balance sheet to act - trading at a valuation that does not reflect the full picture.

🌟Starr's Rating

Pyro, 53b Southwark St, London SE1 1RU

Greek restaurants have been experiencing a renaissance in London. Pyro is a new opening in London Bridge that does not disappoint.

The interior is low lit with candles to accentuate the focus on flames. It has an air of cool that almost makes you question if you should be there, just like a Mykonos beach club, but with good food.

Start with a cocktail - the Midas is a delicious spice infused tequila option. The potato pittas do not disappoint (more often than not, I find pitta and dip a bit underwhelming), but these were crisp and fluffy, perfect with the tarama. Standout dishes were the spanakopita bites, tuna dolmades and the Dorset lamb flatbreads (the lamb was really tasty). Make sure to add a side of the crispy layered potatoes - potentially some of the best in London…

Take your: Mate

StarrRating: ⭐⭐⭐⭐⭐⭐⭐⭐⭐ (9/10)

Important Information

This material is provided for information purposes only and does not constitute an offer to sell, a solicitation to buy, investment advice or a personal recommendation. It does not take into account the investment objectives or financial circumstances of any specific person. You should make an independent assessment of any investment described herein, including seeking tax, legal and accounting advice where appropriate. References to specific securities are illustrative only and not recommendations to buy or sell; securities discussed may not be suitable for all investors. Opinions expressed do not guarantee price appreciation. Haverstock Capital LLP monitors portfolios continuously and may alter its views based on market, economic, political or portfolio-specific factors. Any forward-looking statements are based on current expectations and involve risks and uncertainties; actual outcomes may differ materially. Haverstock Capital LLP undertakes no obligation to update them. Unless otherwise stated, all information sourced from Haverstock Capital LLP as at the date of publication. While believed to be reliable, no representation or warranty is made as to its accuracy or completeness.