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Market Overview: Frankfurt Stock Exchange (DAX) 2011, wk. 16
1
Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained init. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Week 17, which was shorter due to Easter holidays, has brought constant positive trendsto theFrankfurt Stock Exchange.The DAX indexincreasedevery day;the biggest growth was observed onThursday, while Friday¶s closing value of 7,514 is the highest that has been reached this week.Overall, the DAX index value increased by
2.97%
over the week 17.Such trends can be observed inother stock exchanges as well; however, DAX remains one of the most successfully performingindexes (see graph below).
Figure 1 Changes in the DAX index
from April 21 till April 29. Compared to changes in the New York Stock Exchange(NYSE), International and Commodities ETF (MSCI), and the Tokyo Stock Exchange (Topix Core 30)
 
On Thursday it was published that German unemployment has fallen below 3 million (7.3 percent)for the first time in almost 19 years in April in adjusted terms, increasing the likelihood thathousehold spending will boost economic growth. This fact supports the good state of Germaneconomy, similarly like the other statistical data that has been published during previous weeks.The winners of week 17 are
Volkswagen AG (VOW)
with a gain of 
11.95%
and
PorscheAutomobil Holding SE (PAH3)
with a gain of 
10.15%
. This week was not so fortunate for 
SAPAG (SAP.DE)
and
Commerzbank AG (CBK.DE)
,which are the biggest losers with a decline of 
4.37%
and
2.49%
respectively.
Volkswagen AG (VOW)
was the week¶s top performer. Volkswagen is a Germany-basedautomobile manufacturer which consists of Automotive and Financial Services divisions. Theshares rose 1.6% on Tuesday and surged ¼5.80, or 4.8%, on Wednesday after the company reportedrecord quarterly operating profit (Ebit more than tripled to 2.91 billion eurosfrom 848 million eurosa year earlier). The increase in profit comes from the rising demand in China where the firm¶s VWand Audi brands attracted more customers. Volkswagen is merging with Porsche, this week¶ssecond best performer, and holds a 49.9% stake in the company¶s carmaking division (Porscheowns a 51% stake in Volkswagen). Porsche reported earnings before interest and tax of 496 millioneuros, more than double compared to last year¶s. The shares continued to climb and rose 3.56% and1.53% on Thursday and Friday respectively as Commerzbank raised target on VW¶s preferenceshares affirming the µbuy¶ recommendation (meaning that the shares are expected to outperform theDAX index by at least 15% over the next six months). The total gain over the course of four dayswas an impressive
11.95%
.
 
 
Market Overview: Frankfurt Stock Exchange (DAX) 2011, wk. 16
2
Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained init. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Some basic technical analysis of the stock suggests that the downward trend which lasted sincemid-December 2010 may be reversing as strong performance this week broke the resistance lineand the MACD indicator suggests a bullish trend (See figure 3). The readers are welcome toanalyze the stock further and make their own conclusions.
Figure 2 Performance of Volkswagen AG (VOW) (week17)
 
 
 
Market Overview: Frankfurt Stock Exchange (DAX) 2011, wk. 16
3
Market Overview is not an advice. Neither authors nor iFund or other representatives are liable for possible use of information contained init. Relatively reliable public information (Exchanges websites, Bloomberg, Reuters, etc) was used to produce this Market Overview.
Figure 3Basic technical analysis of Volkswagen AG (VOW)
 
The shares of 
Porsche Automobil Holding SE (PAH3)
rose nearly as significantly as VW¶s andthe stock became the second top performer on the Frankfurt Stock Exchange. The shares advanced2% on Tuesday on speculation that Porsche SE may increase sales by 10% this year. As thecompany¶s carmaking division announced increased income thanks to a 62% jump in sales of Porsche¶s revamped best-selling model, the Cayenne, the shares rallied 5.9% to ¼47.87 per share.The price continued to rise and was up 1.6% on Thursday and 0.6% on Friday, closing at ¼48.82and ending the week with an increase of 
10.15%
.A quick look at the technical analysis of the stock shows that although the shares are rising, theymay soon hit the resistance line and start declining, continuing the downward trend which has beenin effect since late January (See figure 5). The MACD indicator, however, does not send the µsell¶signals yet.
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