DAX (Frankfurt) German Stock market overview.

Week : 11, 12/03/2012 16/03/2012

Week 11 was quite successful for DAX market; the index experienced a 4.03% growth and closed the week with value of 7,157.82 points. The major increases were on Tuesday and Wednesday, due to improving economy outlook of US. The improving economic outlook in the US helped European equities maintain their rally, with German stocks among the biggest risers. Biggest winners were E.ON AG, Deutsche Bank and Metro AG. Biggest losers: Volkswagen AG, Bayer AG and Fresenius SE & Co KgaA. The overall turnover 23,29 billion euro. Gainers. The best-performing stock during this week was E.ON AG (EOAN), one of the largest public utility companies in Europe. During the week it gained significant 10.04%. On Monday E.ON AG experienced slight decrease in prices of 0.68%. Despite the fact that the company announced 2.22 billion euro loss in 2011, caused by the sudden closure of the country's oldest nuclear plant, on Wednesday share prices of the company exploded by 7.03%, due to successfully renegotiated gas purchasing contract with Norways Statoil. Such a significant gain, which is the largest intraday gain in the last six months, was also caused by increase in expected EBITDA to 11.612.3 billion in 2012-2013. During Thursday and Friday stock grew by 1.96% more and closed at 18.54. In addition, E.ON AG announced that it plans to expand to Brazil, Turkey and India, where energy demand is expected to grow rapidly, meaning that shares may advance even further.

Figure 1. EOAN share prices. Source: markets.ft.com

One of the last weeks biggest gainers is Deutsche Bank AG (DBKGn.DE) with an increase in share prices by 9.76%, from 35.23 EUR to 38.67 EUR. Deutsche Bank is a currently growing global investment bank which is mostly oriented towards private clients. The biggest increase in share price happened between Tuesday 13/3 and Wednesday 14/3. It happened because of the announcement of Deutsche Banks management board change due to what the new chief operating officer will be Henry Ritchotte, chief risk officer will be Stuart Lewis and Stephan Leithner will become management board member in charge of personnel and head of Europe.

Figure 2. DBKGn share prices. Source: markets.ft.com

Fallers. The top faller of this week with rather slight decrease of 1.09% in share prices was Volkswagen AG (VOW3). The Volkswagen Group is one of the worlds leading automobile manufacturers and the largest carmaker in Europe. On Wednesday the shares were lifted by the improving economy outlook of US. Volkswagen rose 3.13 per cent, after JPMorgan increased its target price on the stock to 192 from 187, as the broker widened its 2012 estimates for the German carmaker. However, this increase during the middle of the week didnt change the situation of VOW3 being the biggest faller. The main reason for the decrease of share prices in VOW3 is the unstable situation in the Western Europe market. Due to euro debt crisis and the unflattering economic outlook (even concerns on default of Greece), the car registrations fell by 20.2 percent in France, 18.9 in Italy and 2.1 percent in Spain, thus worsening the car manufacturers situation. Also share prices decreased because of on Friday disclosed information about the plans of introducing the first lady on the companys board. Ursula Pich, the wife of Ferdinand Pich, VWs chairman and grandson of the inventor of the VW beetle is not currently actively working kindergarten teacher. The fact of making her a board member has made the trust of investors smaller.

Figure 3. VOW3 share prices. Source: markets.ft.com

During the last week Bayer share prices fell by 0.64% (-0.64%). Bayer is a global enterprise headquartered in Germany with core competencies in the fields of health care, nutrition and high-tech materials.

Bayer share price rose slightly on Monday after India approved its generic cancer drug Nexavar, even though this announcement should have decreased their share price. Bayer (BAYRY) is disappointed with Indias decision to issue a compulsory license, which gives the rights for a company in India to produce Nexavar at 3% of the price that Bayer asks for this drug, the company said in an e-mailed statement. We will evaluate our options to further defend our international property rights in India. In the future this event could reduce the Bayer market share in India. Governments can grant compulsory licenses to allow a company to make a patented product or use a patented process without the consent of the patent owner (in this case Bayer). On Wednesday Bayer said that the U.S. Food and Drug Administration approved a new indication for oral contraceptive Natazia to treat heavy menstrual bleeding. The shares fell 0.67 percent to 55.26. Bayer fell to 54.66 on Thursday morning after JPMorgan cut the stock to neutral from overweight.

Figure 4. Bayer AG share prices. Source: markets.ft.com

The company`s share price this week fell by 1.04% (-1.04 %). Fresenius SE & Co KGaA is a company headquartered in Germany and is a part of the Fresenius Group, operating in the healthcare sector and offers products and services for dialysis, hospitals and outpatient medical care. A week ago Fresenius said that Chief Executive Officer Ben Lipps will retire at the end of the year, and Rice Powell, who runs the German dialysis providers North American unit, will replace him. This caused a decreasing effect in share prices which hasnt stopped. In conclusion, analysts at ZEW Center for European Economic Research in Mannheim, Germany announced that the index of investor and analyst expectations rose to 22.3 from 5.4 in February, which seeks to predict economic development in Germany, thus the following week growth in the Frankfurt Stock exchange should continue.