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DAX 30 Performance (YTD May 2021)
Germany’s prime index opened at 15.191 points and closed at 15.421 points (+230 points) in May. It was a hard fight against the 15.500 points barrier, whereby the index finally closed slightly below. But – that’s the good news – the overall performance was not bad at all and is even remarkable on a year-to-date basis. Investors seem to make profit at high price levels just to get back into the market after a small dip. Corporate news were dominated by Vonovia’s takeover offer to Deutsche Wohnen making Germany’s leading nationwide residential real estate company bigger than before. Both companies – Vonovia as well as Deutsche Wohnen – are part of our Top 3 and Flop 3 section. But which one was Top – and which one was Flop?
Tops and Flops of the Month
Top 3 Companies
adidas has upgraded ist full-year outlook for 2021 after reporting its first-quarter results. The sportswear company from Herzogenaurach, Germany, increased its sales by +27 % (adjusted for exchange rate effects). Full-year sales are now expected to grow at a high-teens rate in 2021. This very positive trend is mainly driven by exceptional improvements in direct-to-consumer sales and (Corona-related) booming e-commerce demand. In conclusion, adidas has done an excellent job of adapting its distribution channels to a changing business environment in times of pandemic.
It has been the most relevant news concerning the DAX 30 index in May 2021. On 24th May 2021, Vonovia announced to make a voluntary public takeover offer to the shareholders of its biggest rival Deutsche Wohnen. The takeover offer is to acquire all outstanding shares of Deutsche Wohnen for 52 EUR in cash per share. Consequently, the share price climbed from below 46 EUR to the “deal price” of around 52 EUR. This corresponds to a premium of +17.9 % on the closing price of Deutsche Wohnen on 21th May 2021.
Germany’s leading logistic company is among the winners of the Corona pandemic due to a growing number of packages that are being sent. After the impressive stock price run in 2020, the share is among the top performers in 2021 as well. 16 experts analyzed the stock in May – with 14 “buy” and 2 “hold” recommendations bringing the share to its new all-time high. DHL manager Thomas Ellmann expects the transportation of Corona vaccines to become a long-term business for the company.
Flop 3 Companies
On 26th May, Delivery Hero announced that Glovo will acquire Delivery Hero’s operations in the Balkan region (Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Romania and Serbia). Furthermore, Delivery Hero announced to appoint Pieter-Jan Vandepitte (Chief Operating Officer) as the third member of the Management Board and to extend the contract of its CEO and CFO for another four years.
For the second month in a row, we’re covering Siemens Energy in our Flop 3 section. The political situation in Belarus is a complex issue for the company, as Siemens Energy supplies gas turbines to the country of Alexander Lukashenko – but cannot abandon its contract obligations. Nevertheless, experts are optimistic about the further business prospects. In May 2021, Siemens Energy got 15 “buy” and 1 “sell” recommendations from experts.
Vonovia’s takeover offer to Deutsche Wohnen shareholders had a positive effect on the share price of the company being acquired, but a negative effect on the share price of the acquirer itself. It’s the biggest-ever real estate acquisition in Germany making Vonovia a housing giant with more than 500,000 apartments. It will be challenging for the company to bring both corporate cultures together. According to Harvard Business Review, most big mergers and acquisitions fail as people are an unpredictable factor. But Vonovia is well-experienced in making big (successful) deals.