A successful year for Volkswagen AG on the stock markets
The performance of ordinary and preferred shares was unequivocally positive in fiscal 2012. However, for Volkswagen AG shareholders the year was also marked by pronounced volatility on the stock markets precipitated by the European debt crisis. Volkswagen further strengthened its liquidity and capital base through the successful issue of a €2.5 billion mandatory convertible note.
Fiscal year 2012 was dominated by the debt crisis in Europe, the elections in the United States and the change of government in China. The year started significantly better on the capital markets than had been expected at the end of 2011. The threat of the crisis in Greece spreading to other members of the eurozone was mitigated by the negotiations on the second recovery package for Greece. The additional liquidity injection by the European Central Bank (ECB), together with positive economic indicators and optimistic company forecasts, prompted a rise in share prices on financial markets around the world.
In the second quarter of the year, indications of a deepening debt crisis in Europe put the markets under pressure. More cautious forecasts of economic growth in China as well as uncertainty about the future composition of the government in Greece led to the DAX temporarily falling to an annual low of under 6,000 points. Market sentiment brightened in the wake of the expansion of the European rescue fund and the agreement reached by the EU member states on the European fiscal pact in mid-June.
The DAX started to regain some of the lost ground at the beginning of the second half of the year when the rescue package for Spanish banks was approved and the ECB cut its key interest rates to the lowest level in its history. This trend was given a further boost by unexpectedly strong economic data from China and the United States as well as healthy corporate results for the first half-year. The ratification of the European Stability Mechanism and the resolution on unlimited bond-buying by the ECB lifted the DAX at the end of the third quarter to a preliminary high for the year of over 7,400 points.
In the closing quarter, uncertainty about a long-term solution to the problems in Greece and other countries on the periphery of the eurozone initially put a damper on the uptrend, as a result of which Germany’s leading index mainly moved sideways. Particularly the doubts about the ability to reform the eurozone prevented the DAX from rising further and led to several sharp price fluctuations. Furthermore, the elections and the automatic budget freezes and tax increases planned for the New Year (the fiscal cliff) impacted price trends in the United States during the fourth quarter of the year. By contrast, the seamless changeover in China’s political leadership bolstered the markets. Hopes of a speedy end to the US budget dispute then pushed the DAX up to new annual highs in the last few weeks of trading.
At the end of 2012, the DAX had reached 7,612 points, a significant increase on the previous year’s figure (+29.1%). The EURO STOXX Automobile & Parts closed the year at 338 points, 35.3% higher than at the end of the previous year.