Bloomberg News

German Stocks Rise for Third Day as Greek Bondholders Sign Up to Debt Swap

March 09, 2012

German (SXXP) stocks gained for a third day after most private creditors agreed to a Greek debt swap and German exports advanced more than analysts forecast.

Linde AG added 5.6 percent after the supplier of industrial gases predicted an increase in earnings and sales this year. Metro AG (MEO), the biggest German retailer, advanced after saying it will merge the two units of its cash and carry unit into one management board. Merck KGaA (MRK), the maker of the Victrelis hepatitis C drug, climbed 3.2 percent as Deutsche Bank AG (DBK) recommended buying the shares.

The DAX Index (DAX) rose 45.67, or 0.7 percent, to 6880.21 at the close in Frankfurt after rallying the most in two months yesterday. The index is heading for its second weekly decline in 2012. The broader HDAX Index also added 0.7 percent today.

“The very strong and positive result provides a major opportunity now for Greece to move ahead with its economic reform program,” Josef Ackermann , chairman of the Institute of International Finance, who is also chief executive officer of Deutsche Bank, said in an e-mailed statement. “These are important steps towards resolving the Greek debt crisis.”

The DAX has rallied 17 percent so far this year as the European Central Bank lent regional financial institutions more than 1 trillion euros ($1.3 trillion) for three years and U.S. economic reports topped estimates.

U.S. Jobs

“The Greek debt swap marks the end of lower risks spurring a climb in share prices,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen, where he helps manage $55 billion. “Investors look more to the real economy again.”

A Labor Department report showed that the U.S. economy added more jobs in February than forecast. The 227,000 increase in payrolls followed a revised 284,000 gain in January, the release showed. Job growth over the last six months was the strongest since 2006. The median projection of economists in a Bloomberg News survey called for a 210,000 increase in the workforce in February. The unemployment rate held at 8.3 percent.

Today is the third anniversary of the beginning of a bull market in U.S. stocks that followed the housing crisis in 2008. The Standard & Poor’s 500 Index has more than doubled from its 13-year low on March 9, 2009, while the DAX has jumped 86 percent.

Greece said bondholders owning 85.8 percent of Greek-law bonds agreed to the debt swap, enabling it to proceed with the transaction. The government said it will trigger an option forcing more investors to join, increasing the participation to 95.7 percent.

German Exports

German exports rebounded in January as the global economy showed signs of recovery. Exports, adjusted for work days and seasonal changes, increased 2.3 percent from December, when they dropped a revised 4.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a gain of 2 percent, the median of 13 estimates in a Bloomberg News survey showed. Imports increased 2.4 percent after declining 3.9 percent.

Linde AG (LIN) rose 5.6 percent to 133.05 euros after saying earnings and sales will increase this year as demand in Asia and liquid-and cylinder-gas orders helped the world’s second-biggest maker of industrial gases post higher-than-expected profit.

Earnings before interest, taxes, depreciation and amortization jumped 8.6 percent to 847 million euros in the fourth quarter, the Munich-based company said today. Analysts predicted 808.3 million euros. Linde proposed a dividend of 2.50 euros a share, an increase of 14 percent.

Metro Gains

Metro (MEO) rose 3.2 percent to 28.21 euros. The retailer, based in Dusseldorf, will merge the two units of its cash and carry unit into one management board to be led by Frans Muller as the company restructures “to be able to respond faster to the economic changes in our 30 countries,” Olaf Koch , Metro’s chief executive officer, said in an e-mailed statement after the market closed yesterday.

Merck gained 3.7 percent to 78.60 euros after Deutsche Bank raised its rating on the stock to buy from neutral.

Fresenius Medical Care AG dropped 1.9 percent to 51.05 euros after the German (SXXP) dialysis provider said Chief Executive Officer Ben Lipps will retire at the end of the year, and Rice Powell, who runs Fresenius’ North American unit, will replace him.

Lipps, 71, has worked in the Fresenius dialysis division since 1985. He became CEO and chairman of the management board in 1999, when Fresenius Medical Care’s annual sales were $3.8 billion. Revenue totaled $12.8 billion last year.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

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


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