Bloomberg News

German Stocks Rise, Rebounding From Three-Day Loss; SAP Gains

February 27, 2012

Feb. 24 (Bloomberg) -- German stocks advanced, rebounding from three days of losses, after SAP AG proposed a dividend that exceeded analysts’ estimates and Deutsche Bank AG rallied.

SAP rose 1.5 percent to the highest since October 2000. Deutsche Bank, the country’s biggest lender, gained 4.5 percent after Bank of America Corp. advised buying the shares.

The DAX Index increased 54.97, or 0.8 percent, to 6,864.43 at the 5:30 p.m. close in Frankfurt, for a 0.2 percent weekly gain. The index has surged 16 percent so far this year as euro- area leaders took measures to contain the region’s debt crisis and as U.S. economic data surpassed estimates. The broader HDAX Index climbed 0.8 percent today.

“Investors are favoring blue-chip stocks, or those with good visibility,” said Arnaud Scarpaci, a fund manager at Agilis Gestion SA in Paris, which oversees about $84 million. “They prefer visibility and growth. Investors need something concrete. We see that with BASF and SAP’s dividends, which are reassuring to investors.”

Germany’s gross domestic product declined 0.2 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today, confirming an initial estimate published on Feb. 15. The sovereign debt crisis damped export demand across the euro area, leading to the fall.

SAP Gains

SAP rose 1.5 percent to 50.29 euros. The biggest maker of business management applications proposed a dividend that exceeded analysts’ estimates after posting profit last year that beat forecasts.

The executive board recommended a 25 percent increase on its 2011 dividend to 75 euro cents a share, plus a one-time 35- cent payout for its 40th anniversary, Walldorf, Germany-based SAP said yesterday. Analysts had projected 72 cents, according to estimates compiled by Bloomberg.

Deutsche Bank jumped 4.5 percent to 34.86 euros after analysts at Bank of America’s Merrill Lynch unit upgraded their recommendation on the shares to “buy” from “neutral.”

Many investors are holding “quality names,” missing European bank stocks with earnings-per-share momentum or re- rating potential, they wrote in a note, naming top picks including Deutsche Bank.

‘Very Difficult Year’

RWE AG added 2.2 percent to 33.24 euros. Chief Executive Officer designate Peter Terium said Germany’s second-biggest utility is almost over the worst after a “very difficult year” following the government’s decision to exit nuclear power.

RWE plans to save an additional 1 billion euros a year in 2013 and 2014. The utility is considering measures such as increasing cross-border cooperation on power plants to streamline operations, Terium told reporters yesterday in Essen, where the company is based.

BASF SE advanced as much as 2.9 percent to 66.48 euros before paring the gain to 64.70 euros. The world’s largest chemicals maker said fourth-quarter sales gained 10 percent to 18.07 billion euros ($24 billion), beating a 16.95 billion-euro estimate. Earnings before interest, taxes and items fell 15 percent to 1.51 billion euros, in line with analysts’ predictions. Investors will get a dividend of 2.50 euros, exceeding a Bloomberg estimate of 2.40 euros a share.

Volkswagen AG rose 1.3 percent to 126.60 euros after the company reported earnings that were in line with analyst estimates. Europe’s largest automaker said earnings before interest and taxes advanced 58 percent to 11.3 billion euros, matching the average estimate of 22 analysts surveyed by Bloomberg.

Brenntag AG slumped 3 percent to 84.15 euros as Brachem Acquisition S.C.A. sold 7 million shares in the German chemical distributor, more than it initially announced.

--With assistance from Alexis Xydias in London. Editors: Alan Soughley, Srinivasan Sivabalan

To contact the reporters on this story: Adria Cimino in Paris at acimino1@bloomberg.net;

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


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