LANXESS Stock
LANXESS Stock
Stock markets showed considerable volatility in the second quarter of 2008. The German indices booked substantial gains on the heels of the downturn that characterized the first few months of the year, but again suffered significant losses toward the end of the period. News about the financial market crisis, oil prices and inflation as well as the ongoing strength of the euro proved to be the main drivers of market developments. All in all, the uncertainty on the capital markets continued to increase in the second quarter.
Share price moves in line with market volatility
The German stock indices began to recover in April. By early May, the DAX had topped 7,000 points again, a level last reached in February, and by mid-May, the MDAX had approached the 10,000-point mark for the first time in 2008, and the Dow Jones STOXX 600 ChemicalsSM rose by more than 500 points. Confidence was fueled at this time by encouraging news from the U.S., where the economic data exceeded expectations and the Federal Reserve cut the federal funds rate once more. The brief dip in oil prices gave the equity markets additional hope. Having experienced strong selling pressure in the nervous market of the preceding months, shares of mid-cap chemical companies benefited particularly from the recovery.
With markets calmer, LANXESS shares also performed better. For the first time in months, the capital market reacted favorably to important, positive corporate news from LANXESS, including the solid earnings for Q1 2008 and the company’s confirmation of the previously stated profit targets for 2008 despite the prevailing market environment. Moreover, at the Annual Stockholders’ Meeting held in late May, LANXESS recommended to its stockholders a dividend of €1.00 per share, four times the previous dividend. Starting in mid-May, LANXESS shares steadily approached €30 for the first time in 2008, reaching their half-year high of €32.68 on June 5.
In June sentiment reversed again. Markets succumbed to fears about rising inflation and the effects of the financial crisis, and the price of oil reached a new record. Volatility persisted, with the DAX sliding more than 10% in June alone and closing the month at 6,418. Over the second quarter as a whole it shed 1.8%, having already plunged some 20% in the first quarter. The MDAX ended the period just 2.8% higher at 9,035 points. The Dow Jones STOXX 600 ChemicalsSM returned to below 500 points, closing the quarter up 6% at 494 points.
The shift in sentiment and resulting market decline again impacted LANXESS’s stock price, despite the company’s solid performance. At the end of the period LANXESS shares were trading at their first-quarter level, closing the quarter on June 30, 2008 at €26.08 (March 31, 2008: €25.43).