Bloomberg News

German Stocks Decline, Paring Monthly Advance; EON Falls

January 31, 2013

German stocks declined, paring the benchmark index’s eighth straight monthly advance, as a fall in the country’s retail sales offset a drop in unemployment.

EON SE lost 3.1 percent after UBS AG advised selling the shares. Infineon Technologies AG (IFX) gained 3.9 percent after forecasting an improvement in earnings. Deutsche Bank AG (DBK) added 2.9 percent after it said its core Tier 1 capital ratio rose to 8 percent, even as it reported a worse-than-expected loss.

The DAX Index (DAX) declined 0.5 percent to 7,776.05 at the close of trading in Frankfurt. The gauge still advanced 2.2 percent in January for its eighth straight monthly gain. That’s the longest such winning streak since 1998. The number of shares changing hands on the index was 41 percent higher than the average of the past 30 days. The broader HDAX Index slid 0.5 percent today.

“We had a good rhythm of economic news, now we need more for stocks to move higher to the next level,” said Louis de Fels, a Paris-based fund manager at Raymond James Asset Management International, which oversees $43 billion worldwide. “It’s normal to take a pause after the recent gains.”

German retail sales dropped more than economists expected in December as uncertainty about the economic outlook weighed on consumer confidence. Sales, adjusted for inflation and seasonal swings, plunged 1.7 percent from November, when they rose a revised 0.6 percent, the Federal Statistics Office said.

German unemployment unexpectedly declined in January for the first time in 10 months. The number of people out of work fell a seasonally adjusted 16,000 to 2.92 million, the Federal Labor Agency said. Economists had predicted an increase of 8,000, the median of 31 estimates in a Bloomberg News survey showed. The adjusted jobless rate dropped to 6.8 percent, matching a two-decade low.

U.S. Activity

Business activity in the U.S. expanded more than forecast in January, a sign manufacturing picked up at the start of the year, according to a report today.

The MNI Chicago Report’s business barometer rose to 55.6 this month, the highest since April, after 50 in December. A reading of 50 is the dividing line between expansion and contraction. The median forecast of 48 economists surveyed by Bloomberg was 50.5.

EON, Germany’s largest utility, lost 3.1 percent to 12.81 euros, for the biggest decline on the benchmark index. UBS recommended selling the shares, saying it estimates unchanged earnings per share after 2013.

Aixtron SE, the maker of equipment for the semiconductor industry, slid 5 percent to 10.05 euros. Supervisory board Deputy Chairman Holger Juergensen and ordinary member Karl- Hermann Kuklies resigned with immediate effect, Aixtron said.

Wirecard Falls

Wirecard AG (WDI), which offers Internet payment services, retreated 7.9 percent to 16.77 euros. The company said it sees 2013 earnings before interest, taxes, depreciation and amortization of 120 million euros ($163 million) to 130 million euros. That’s lower than the estimate of 133.3 million euros.

K+S AG (SDF), Europe’s largest potash maker, retreated 2 percent to 33.25 euros. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, forecast first-quarter profit that trailed analysts’ estimates.

Infineon climbed 3.9 percent to 6.65 euros. Europe’s second-biggest chipmaker forecast that earnings will improve in the current quarter as demand picks up in the car industry.

Fresenius SE, Germany’s biggest operator of private hospitals, advanced 1.3 percent to 89.65 euros. Goldman Sachs Group Inc. raised its recommendation on the shares to buy from neutral, saying its current valuation offers an attractive entry point as it has underperformed the sector.

Deutsche Bank

Deutsche Bank added 2.9 percent to 38.21 euros. Europe’s biggest bank by assets said its core Tier 1 capital ratio, a measure of financial strength, stood at 8 percent on Dec. 31 under Basel III rules. That exceeded its forecast for a level of 7.2 percent. Co-Chief Executive Officer Anshu Jain said he expects a ratio of 8.5 percent at the end of the first quarter.

Deutsche Bank posted a fourth-quarter loss of 2.17 billion euros, more than analysts had estimated, after it eliminated more than 1,400 jobs and set aside 1 billion euros for legal expenses.

Bechtle AG (BC8), a retailer of office supplies, jumped 7.5 percent to 33.25 euros. The company reported 2012 pretax profit of 79 million euros compared with an estimate of 76.5 million euros.

To contact the reporter 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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