War in Ukraine, rising energy costs, return of interest rates: 2022 was a turbulent year for equity investors. The German stock exchange bormater loses a good eighth. But with a few individual values, cash could also be made this year, especially with armor and most of the energy values.
The German stock market once again closed an overall dull trading year with losses. The leading German index, the DAX, fell back below the 14,000 point mark. At the end of the shortened trading day, there was a minus of 1.1 percent and a closing price of 13,924 points on the board. Calculated over the year, the German stock exchange barometer lost more than twelve percent and thus recorded the worst stock market year in four years. In the previous year, the DAX had made a gain of almost 16 percent. The MDAX ended the last trading day of the year 1.3 percent lower at 25,118 points. For the index of medium-sized stocks, the annual minus is even 28.5 percent.
The trigger for the significant weakness in 2022 was Russia’s war of aggression in Ukraine. Energy prices rose rapidly and fueled an already high level of inflation, which made it necessary for the central banks to intervene. As a result, interest rates rose rapidly and significantly. However, it took the ECB a long time to counter inflation, partly because it was concerned about the economy at the same time. It did not raise interest rates until the end of July for the first time in six years, and further and increasingly decisive steps followed.
In the past twelve months, there was a lot of money to lose not only in equities, but also in bonds. The yield on federal bonds with a term of ten years rose from minus 0.12 percent at the beginning of the year to 2.50 percent most recently, and bond prices fell accordingly. Among other things, the rising interest rates are making construction more expensive, so that after years of boom in the real estate market, prices have also turned downwards here.
Looking at the major stock markets in Europe, only the British FTSE 100 also closed earlier. Although it was also down on Friday, it outperformed the other exchanges over the course of the year because of its numerous oil and gas stocks. He can come up with a plus of around one percent. The EuroStoxx 50, the leading index in the euro zone, is heading for an annual minus of around 11 percent, after gaining 21 percent in the previous year.
On the company side, some “window dressing” was done as usual at the end of the year. By this, stockbrokers mean buying shares that have been particularly good to date or selling shares that have done particularly badly in order to look good in the end-of-year statement. It was fitting that Zalando and Vonovia were among the weaker Dax stocks of the day. These two lost about half their value over the year as a whole, making them the biggest losses among the DAX members. The Beiersdorf paper, on the other hand, remained relatively stable at minus 0.2 percent and is also one of the favorites for the year as a whole with an increase of a little less than a fifth.
The two biggest annual winners from the three indices DAX, MDAX and SDAX are Rheinmetall with a plus of 124 percent and PNE with an increase of more than 150 percent. The armaments group benefited from the prospect of plenty of orders from rising military budgets in western countries as a result of Russia’s war against Ukraine. The energy transition, higher electricity prices and takeover fantasies provided impetus for the wind farm developer PNE. After all, the utility giant RWE was up 19 percent. In general, shares in companies from the renewable energy sector were among the big winners, partly because they were able to sell their energy at much higher prices.
The year was disastrous for the energy supplier Uniper. The gas trader’s business model worked as long as Russia supplied the agreed gas cheaply. However, because Russia gradually stopped doing so as part of the West’s sanctions against the aggressor, Uniper had to stock up on gas on the market in order to fulfill its supply agreements. That cost billions, in the end the German state “saved” the company and it was nationalized. The stock lost around 94 percent of its value.
2022 was not the year of major takeovers on the stock market, and there were hardly any IPOs in the difficult environment. Porsche provided a ray of hope: the mother company, Volkswagen, brought the advantages of the sports car manufacturer to the stock exchange. The IPO was the largest in Germany since Deutsche Telekom in 1996. It wasn’t a brilliant start at first. After an issue price of EUR 82.50, the first price was EUR 84 before it rose to around EUR 112 in the weeks that followed . With a closing price of EUR 94.75, the share was one of the few DAX winners (14 percent).
