Bloomberg News

German Stocks Advance; Commerzbank, Allianz, Volkswagen Gain

February 13, 2012

Feb. 13 (Bloomberg) -- German stocks gained, rebounding from last week’s decline, after Greece approved austerity measures to secure an international bailout.

Commerzbank AG advanced 1.6 percent, while Allianz AG rose 1.3 percent. Bilfinger Berger SE, Germany’s second-largest builder, and Hannover Re, the world’s fourth-biggest reinsurer, rose after their earnings beat forecasts. Volkswagen AG climbed after Morgan Stanley advised buying the carmaker’s stock.

The DAX Index rose 0.7 percent to 6,738.47 at the close of trade in Frankfurt, following its first weekly decline in eight weeks. The DAX has jumped 14 percent this year amid speculation the global economy will withstand the impact of the euro area’s debt crisis and as central banks acted to fuel growth. The broader HDAX Index added 0.6 percent today.

“We don’t think though that the Greek situation has the potential to completely destabilize the markets as it could have last summer, especially given far more aggressive ECB participation,” Mislav Matejka, European equities strategist at JPMorgan Chase & Co. in London, wrote in a report today. “Medium term, we think the case for an asset allocation shift back into equities is becoming compelling.”

Greek Prime Minister Lucas Papademos won parliamentary approval for austerity measures to secure an international bailout after rioters protesting the measures battled police and set fire to buildings in downtown Athens.

The Stoxx 600 Banks Index has surged 17 percent this year even as Greece continued talks with bondholders for a debt-swap agreement.

Commerzbank, the lender bailed out by Germany in 2008, gained 1.6 percent to 2.09 euros. Allianz, Europe’s largest insurer, climbed 1.3 percent to 88.08 euros.

Bilfinger Earnings

Bilfinger Berger advanced 1.9 percent to 72.44 euros, its first gain in six sessions. The builder reported full-year net income of 394 million euros ($522 million), beating the average estimate for profit of 374 million euros in a Bloomberg poll of analysts. Bilfinger said it had a “positive” outlook for 2012.

“The results beat was broad based; all divisions delivered results above our expectations,” Deutsche Bank AG wrote in a report following the release. “The combination of a moderate result beat, a positive outlook and a strong dividend proposal are clearly positive and underpin our investment case.”

The stock reached a record high of 73.85 euros on Feb. 6.

Hannover Re rose 1.2 percent to 41.95 euros. The reinsurer said last year’s earnings “comfortably surpass” its profit target, helped by investment gains. Net income was about 600 million euros in 2011, Hannover Re said in a statement today, citing preliminary figures. That beat the 520 million-euro estimate of 16 analysts surveyed by Bloomberg.

Volkswagen, Europe’s largest carmaker by market value, climbed 2.1 percent to 129.9 euros. Full ownership of Porsche AG should boost VW earnings by 8 percent in 2013 and its shares’ value by 8 euros apiece, according to Morgan Stanley analysts.

A team of analysts at Morgan Stanley led by Stuart Pearson in London reiterated an “overweight” recommendation on Volkswagen shares in a report today entitled “Porsche’s Valentine.”

--Editors: Alan Soughley, Andrew Rummer

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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