Voting rights advisers criticize Commerzbank’s remuneration system

Frankfurt The Commerzbank is holding a virtual general meeting for the first time this year because of the corona crisis. But even without protests from small shareholders on site, there will be no shortage of critical topics at the event on May 13.

Added to this is the criticism of Commerzbank’s remuneration system. The influential voting rights advisor Glass Lewis and his German subsidiary Ivox recommend that shareholders reject the slightly modified remuneration system for members of the Management Board in March 2020. This emerges from the recommendations of both companies for the Annual General Meeting, which are available to the Handelsblatt.

“From our point of view, there is great potential for improvement in the company’s remuneration policy,” says the Glass Lewis study. The goals on which the variable remuneration of the Board of Directors depends are too vague and too focused on the bank’s performance in the past.

Anglo-Saxon investors in particular often follow the advice of proxy advisors such as Glass Lewis and ISS at general meetings. If the Commerzbank shareholders did not endorse the remuneration system, the Supervisory Board would have to deal with it again. Germany’s second largest private bank did not want to comment on this.

Criticism of the number of positions

In his study, Ivox also speaks out against the planned election of Jutta Dönges to the Commerzbank Supervisory Board. The co-boss of the finance agency is to be elected as the new representative of the federal government to the control committee in May – together with Frank Czichowski from the KfW development bank.

Dönges and Czichowski are to replace State Secretary Markus Kerber and Anja Mikus, who heads the State Fund for Nuclear Waste Management. After Commerzbank’s rescue from the crisis, the federal government still has a good 15 percent stake in the bank – and anything but satisfied with the development of the money house in recent years. In Berlin, some have hopes that Dönges and Czichowski can give new impetus to the supervisory board.

But at least Ivox has reservations about the Dönges personnel. There are no doubts about the manager’s qualifications, according to the study based on guidelines of the BVI fund association. “However, there are concerns about the number of mandates.”

Dönges is already a member of the supervisory bodies of the FMS Wertmanagement and the Deutsche Pfandbriefbank. In addition, there is her job as managing director of the finance agency, which Ivox rates as an “executive position” like two mandates.

According to this method of counting, your work on the Commerzbank Supervisory Board would be your fifth mandate. And that would be two more mandates than Ivox recommends for people in an “executive position”. “Therefore, this election should be viewed very critically,” said the voting rights advisor.

The finance agency did not want to comment on Ivox’s criticism. However, a spokeswoman pointed out that Dönges had resigned from the supervisory board of Eurex Clearing in order to avoid conflicts of interest.

In contrast to Ivox, the parent company Glass Lewis has no objection to the choice of Dönges. Other persons familiar with the personnel also consider the appointment to be sensible, after all the financial agency manages the federal government’s participation in Commerzbank and is in close contact with the institute anyway.

Dönges is also highly valued in Berlin because it closely monitored the Commerzbank strategy review. Some also believe that Dönges’ work at FMS Wertmanagement cannot be viewed as a full supervisory mandate.

More concrete goals for 2020

The core remuneration system for Commerzbank board members has existed for several years. In March it was slightly adjusted to take account of the new requirements of the second Shareholder Rights Directive (ARUG II) and the new version of the German Corporate Governance Code. The most important innovation is that a maximum remuneration for each member of the Board of Management of six million euros per fiscal year has now been fixed.

The variable remuneration of the Management Board depends 70 percent on the achievement of the Group’s goals and 30 percent on the development of the department for which the respective Management Board member is responsible. In addition, individual goals have an impact on the amount of bonus payments.

When calculating the variable remuneration for 2019, the development of the bank and the respective department in 2017, 2018 and 2019 is taken into account. Glass Lewis criticizes this approach as backward and advocates “forward-looking” goals. However, this would have the consequence that Commerzbank could not set the bonus payments for 2019 until 2021 – and that the actual payment to the Management Board would then be postponed even further.

Voting rights advisers also take a critical view of the fact that the expectations of the Management Board are not described clearly enough. The performance goals are “only presented in a descriptive manner, but not clearly disclosed,” complains Ivox. As a result, it is not understandable for shareholders whether the goals for the Management Board are ambitious enough, emphasizes Glass Lewis.

Strictly speaking, these comments do not refer to the remuneration system, but to the remuneration report, which the Annual General Meeting does not vote on this year. Nevertheless, there are employees within Commerzbank who find this criticism justified. According to financial circles, the goals for the Executive Board in the 2020 financial year have therefore already been formulated more specifically.

It is of course another matter whether there will be any significant bonus payments in view of the Corona crisis 2020. In addition, the payment of Commerzbank management is generally rather below average compared to other institutions. In the past year, the total remuneration of the Management Board amounted to EUR 12.1 million. At the neighbourhouse Deutsche Bank the executive committee received almost three times as much despite a loss of billions.

Assistance: Jakob Blume

More: Bank President Zielke: “Must review Corona business model”

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Confederation doubles issue volume and introduces new bonds

Frankfurt In the crisis, old habits are thrown into disarray – this also applies to the federal debt manager: the German finance agency announced on Tuesday that it would like to issue federal and government bonds with a term of seven and 15 years for the first time on behalf of the Ministry of Finance.

In addition, the federal government’s new issues are to be increased a second time within two weeks. Instead of the originally planned 210 billion euros, the federal government could now raise more than 400 billion euros in the bond market in 2020. Tammo Diemer, head of the finance agency, said on Tuesday: “We will ensure that the federal government remains capable of dealing with the corona pandemic at all times.”

The federal government collects a little more than half of the amount via short-term papers for up to one year: around 200 billion euros should flow into the budget via federal bonds with a term of at least two years. Most recently, the finance agency collected so much money from federal bonds in 2010. At that time, the agency had to refinance the federal bank bailout in the financial crisis.

The Federal Government’s Corona aid for companies is the reason for the rapidly increasing financing requirements. The flood of new bonds “serves as liquidity provision in order to be able to meet short-term, extraordinary liquidity needs within the framework of the federal package of measures to cope with the coronavirus pandemic,” said Diemer.

The financing of the special programs of the state-owned bank KfW also contributed to the increased need for fresh money. “The aid programs started quickly and successfully,” said Diemer. He also referred to the KfW quick loan for medium-sized companies, which the Federal Government launched on Monday. The federal government wants to help companies by being able to borrow 100 percent guaranteed by KfW.

Finance agency deviates from the previous line

The new maturities are likely to be particularly in the focus of investors: in May, a 15-year federal bond with a maturity in May 2035 will be launched. An increase of 2.5 billion euros is planned for June. On May 12, a seven-year federal bond with a maturity in November 2027 will be issued. In addition to the new issue with a volume of four billion euros, two increases of three billion euros each are planned for June.

The finance agency thus deviates significantly from its previous line of securing the financing of the federal budget through existing securities known on the capital market. These include federal bonds with terms of two, five, ten and 30 years.

In the past, it was a matter of securing federal funding through the established maturities as new debt declined, said Diemer. In doing so, the finance agency always paid attention to keeping the volume of the common federal bonds high in order to ensure the liquidity of the papers.

Now it is possible to increase the volume in the established terms and at the same time to open up new term segments. These could “be further developed into liquid and easily tradable papers,” says Diemer. Investors are currently in particularly high demand for government bonds with a seven-year term. “We would like to benefit from this,” said the head of the finance agency. There would also be a gap in the maturities in 2035 that could be closed with the new 15-year bonds.

It is still unclear how companies can tap into the € 400 billion package for guarantees for debt instruments. The relevant ordinances are still being worked out, but would be nearing completion, said Diemer. “We are in an extraordinary environment,” he emphasized. It was therefore necessary to adjust the federal financial planning a second time within a very short time.

More: The federal government borrows an additional 120 billion euros on the capital market.

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Commerzbank wants to tighten austerity measures and relies on consultants

Commerzbank

Bain & Company consultants are currently looking for additional savings potential at Commerzbank. The pressure has increased in the face of the corona crisis.


(Photo: dpa)

Frankfurt The Commerzbank looks for additional savings and relies on outside help. The consulting firm Bain & Company supported the bank in the planned tightening of the austerity course, said several people familiar with the topic and thereby confirmed a report from the “WirtschaftsWoche.”

According to the magazine, Commerzbank is planning additional savings of 500 million euros. The consultants have already identified 350 million euros, for example by reducing rental costs.

The figure of 500 million euros has been circulating within the bank for some time, but according to Handelsblatt information, this is not a decided new savings target.

How strongly the costs will ultimately be pressed also depends on the course of the corona crisis and its effects, several people familiar with the topic told the Handelsblatt. Commerzbank did not comment on this.

When it launched its strategy in September, the money house announced that it would reduce its net costs by 600 million euros to less than 6.3 billion euros by 2023. The gross savings are expected to amount to one billion euros.

Many investors and financial regulators have criticized the goals as being too ambitious. According to insiders, in an analysis that the BCG consulting firm created for the financial agency, scenarios were run through which additional cost-cutting measures would be possible at Commerzbank. With a good 15 percent, the Federal Government is Commerzbank’s largest shareholder.

According to its own account, the institute started looking for additional savings in autumn. In view of the corona crisis, the project has become even more urgent from the perspective of CFO Bettina Orlopp. “It is more important than ever that we think about additional savings measures,” she said at an investor conference in mid-March.

Germany’s second largest private bank could increase further efficiencies in its existing business model, said Orlopp. In addition, it can reduce the complexity by reducing the number of products and offers.

The bank plans to announce details of the additional savings measures at the latest when it presents its half-yearly figures.

Commerzbank’s previous plans provide for 4,300 jobs to be cut and 200 of the approximately 1,000 branches to be closed. At the annual press conference in February, Orlopp had not ruled out that a tightening of austerity measures could lead to a larger job cut.

More: What investors should know about the online AGM.

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Airbnbs IPO due to slump in sales on the brink

San Francisco, Dusseldorf Tom’s email inbox in the second week of March popped up as many cancellations as before in ten years. The Berliner rents out two of his apartments in the Mitte district via the Airbnb platform. And tourists usually love his apartments: in 2019, the apartments were 95 percent fully booked.

But now nobody is interested. Museums in the capital are closed due to the corona virus, trade fairs canceled. This affects not only Tom, but countless landlords – and thus the platform itself.

Border controls, travel bans and contact bans as well as curfews hit Airbnb as hard as few other companies. Worldwide sales of the platform from San Francisco collapse dramatically, as data from market analyst Airdna show, which are exclusively available to the Handelsblatt.

So far, the company of founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk has weathered many setbacks. But Corona could now hit the core of the company. The virus threatens one of the highest rated startups in the world.

The numbers show: According to Airdna, sales on the platform in Germany were still € 31 million in mid-February, at the end of last week it was just over € 13 million. Airbnb takes a commission from this turnover, which is between 14 and 20 percent.

Airbnb’s business is slumping in other European markets: In France, where Paris is one of the most important Airbnb travel destinations worldwide, sales fell from around 120 million euros in mid-February to 55 million euros in mid-March. It also halved in Italy and Spain from around 60 million to less than 30 million each.

Airbnb is responsible for part of the drop in sales: The platform canceled the cancellation fees for bookings by mid-April. The majority of the costs are borne by hosts anyway, who are now being forced to reimburse them 100 percent.

Landlords have to rent apartments regularly again

Tom says he can understand: “Firstly, because Airbnb itself is currently accumulating losses and nobody knows how long it will take. Furthermore, today’s guests are also tomorrow’s guests, ”he says. “At some point the crisis will be over, and then the guests will remember the good-natured way Airbnbs.”

Tom rents his apartments permanently through the platform. Landlords like him are often criticized for exacerbating the housing shortage in cities like Berlin. That’s why he doesn’t want to read his last name in the newspaper. However, he does not violate the Berlin misappropriation law, among other things because he advertised on Airbnb before it entered into force in 2014.

Rentals have long been a lucrative business for him. Initially, Tom and his wife had only wanted to finance their own apartment with the rental and then wanted to build a second mainstay. In the meantime, they only live on it. But the more dependent the hosts are on their Airbnb rentals, the harder the crisis hits them.

graphic

“We sometimes throw up vomit and clean the toilets ourselves,” says Tom. Renting apartments through Airbnb – that is lucrative, but also work. In the best case, they would need two hours for cleaning when changing tenants.

There are also check-in, laundry and the organization of bookings. According to his own statements, they have about 1000 euros in running costs per month, he says – for ancillary costs, basic costs such as broadcasting fees, tax consultants, insurance and depreciation.

And now that: All bookings were canceled in April, half so far in May, June and July, and 25 percent of bookings had already been withdrawn in August, says Tom. “The virus hits us like any medium-sized hotel.”

He now expects a kind of “market shakeout”. Some Airbnb rental companies would rent apartments to students again. He knows from landlord forums that many should have little choice: “Many only had dollar signs in their heads and were unreasonable when it came to the topic.” No tourists for months? Nobody expected that.

Number of landlords is falling

The Airdna figures also show that some landlords are already turning away from Airbnb: In Germany, the number of landlords fell from 162,000 to 151,000 between January and March. The trend is similar in larger markets: In the United States, the number dropped from 1.045 million accommodations to around one million, in China from 700,000 to less than 600,000. The company does not comment on Airdna’s figures.

However, there are now Signs that there is an effect on the housing market – In cities popular with tourists worldwide, more apartments have been regularly offered for rent since the outbreak of the corona crisis.

The corona pandemic hits the entire travel industry hard: the booking platforms Booking and Expedia have lost 40 and 60 percent of their value since mid-February. The Marriott hotel chain sent tens of thousands of its employees on unpaid forced leave. But for Airbnb the global travel freeze comes at a particularly bad time: the start-up actually wanted to go public in the course of the year.

Before the corona crisis, the Airbnb IPO promised to be the largest technology IPO of the year. The platform is already one of the most valuable start-ups in the world. In its last round of financing in mid-2016, the travel platform was valued at $ 31 billion or $ 105 per share by investors such as Andreessen Horowitz or Google’s investment arm Capital G.

Airbnb chief Brian Chesky

The head of the placement platform could upset many employees with a postponement of the IPO.

(Photo: JEENAH MOON / The New York Times / R)

When Airbnb took over the booking platform Hotel-Tonight in March 2019, which Airbnb partially owned, the value of Airbnb was even valued at more than $ 35 billion or $ 120 per share. For individual transactions in the secondary market, the value of Airbnb stock rose up to $ 166, which would have been an overall valuation of $ 52 billion.

With this tailwind and worldwide recognition, Airbnb boss Brian Chesky even flirted with a direct listing as Airbnb’s way to the stock exchange. With such a listing without syndicate banks, the company does without the PR roadshow and the security mechanisms on the first day of trading, which are intended to prevent a sudden price crash. But Airbnb seemed stable enough to be able to do without all of that.

Also a series of failed IPOs by prominent technology companies like Lyft, About or WeWork in the course of 2019, Airbnb was unable to do anything from the perspective of its investors: after evaluating the trading journal of seven investment funds that hold shares in Airbnb, they still valued an Airbnb share at the turn of the year 2019/20 at $ 120 on average. Some of the funds publish the value of their shares every quarter – they have to re-evaluate Airbnbs value as of March 31.

Deep red numbers

However, negative headlines began to accumulate in the second half of 2019, and not just in the numbers. The most dramatic incident for the company happened at a Halloween party. Five people were shot in an Airbnb apartment in the United States. A horror not only for those affected, but for all landlords and the company. At the time, the company announced, among other things, to take more action against unauthorized parties.

After Airbnb concluded 2017 and 2018 with an EBITDA profit in the low double-digit million range, the company slid deep into the red in 2019. According to a report by the digital trade media “The Information”, greatly increased marketing spending in the first quarter of 2019 caused a loss of $ 306 million – twice as much as in the same period last year.

The loss in the fourth quarter of 2019 also doubled over the comparable period to $ 276.4 million, as Bloomberg recently reported.

Even the marketing turbo could not ensure that sales increased accordingly. While it increased 32 percent to $ 1.1 billion in the fourth quarter of 2019, it grew more slowly than in the previous year.

This year alone Airbnb’s losses are expected to be in the hundreds of millions. However, the mediation platform is not yet in a threatening situation. Airbnb currently has $ 4 billion in liquidity, a spokesman said – $ 3 billion in the bank and a $ 1 billion line of credit that Airbnb has yet to touch.

The finance agency Bloomberg, on the other hand, had cited insiders two weeks ago that the company had only two billion dollars in cash, one billion less than half a year earlier.

The corona crisis now puts founder Brian Chesky under pressure: The growth, which had previously slowed down, should now be a thing of the past. The first three months of the year are considered to be a rather weak travel quarter anyway – but no one knows how long the corona effect will sweep away the platform. And nobody on Wall Street is waiting for a loss-making start-up with lean or no growth.

Employees insist on going public despite everything

According to media reports, Airbnb is currently exploring the valuation at which another private financing round could take place. Ron Conway, one of Airbnb’s first investors, told CNBC on Friday that it was receiving numerous calls from major tech investors who were about to invest right now.

The only question is how low the rating could go. Even the $ 31 billion mark from the last round of 2016 should no longer be sustainable in the current situation, according to insiders. Not only four years of added value would be lost – a “down-round” financing at a lower value awakens the sense of shame in the growth-spoiled Silicon Valley.

The Corona crisis could actually give Airbnb the perfect opportunity to cancel the IPO. Cash reserves should be enough even in a cruel 2020, and once the crisis is over, growth rates could look all the more impressive. But if the company were to cancel, the company would face an uprising of many long-term employees who could then go away empty-handed.

As reported by “The Information”, the company distributed so-called “restricted stock units” (RSU) to many employees who came to Airbnb during a large recruitment wave in 2014 and 2015 instead of the usual stock options and only allowed them to sell them on secondary markets to a very limited extent.

These RSUs are not converted into shares until they go public and have an expiry date – seven years after issue in the Airbnb case. In November, the first employees would lose their chance of a big payday, and the next ones would be in mid-2021: a catastrophic signal for morale at headquarters at 888 Brennan Street in downtown San Francisco.

Last summer, employees wrote a letter to Chesky and his co-founders Joe Gebbia and Nathan Blecharczyk, and pressed for an IPO – which responded in September with the one-line IPO announcement for the following year.

“We only see our package of measures as a first step”

Now Airbnb doesn’t seem to have any good alternatives anymore. Sitting out the crisis and living off cash reserves is risky, but accepting a downround is embarrassing. A direct listing seems ruled out in the current market mood and would also not wash any additional money into the cash register. According to the “Wall Street Journal”, Airbnbs Board is currently advising on a classic IPO – with banks and millions of euros that Chesky actually wanted to save.

Airbnb therefore asked for help last week. In an open letter to US politicians, Chris Lehane, the company’s top lobbyist, asked for emergency loans for the hosts on the platform, who are now breaking out of business. From the hope of the stock exchange to the supplicant – in times of Corona this is quick.

Airbnb rental company Tom has made for bad times. Only after a year would the absence of tourists become critical for his family, he says. Therefore, he can now make his own contribution to the crisis. From the end of March, he rented temporarily at cost price to guest employees of the Berlin Charité and the Robert Koch Institute, whose houses can be reached on foot from his apartments.

More: Cancellation costs due to the corona virus – this is the location for travelers

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Dax closes more than three percent in minus – bank stocks under pressure

Dusseldorf The leading German index closed the week down just under three percent. On Friday, the German stock index closed the day down 3.37 percent at 11,541 points. After the Dax was initially on a recovery course in the middle of the week, things went downhill again on Thursday.

At times the Dax was even this Friday 4.1 percent in the red at 11,455 points. That was the lowest level in seven months.

The US stock markets also continued their downward slide on Friday. The Dow Jones of the standard values ​​fell 2.9 percent at the opening to 25,354 points and has only recovered slightly since then.

The S&P 500 – the most important stock market barometer in the world – slid three percent to 2932 points when it opened and should have lost around ten percent of its value from its record high of February 19 at the end of this week. The technology exchange Nasdaq opened on Friday minus 2.9 percent to 8495 points.

The unexpectedly good data from the US labor market could hardly stabilize the prices, as the numbers only referred to the time before the rapid spread of the corona virus. Last month, 273,000 new jobs were created, the government said on Friday. This is more than what experts expect.

The corona virus is affecting more and more parts of the United States. Against this background, the Fed will have to make regular decisions on interest rates on March 18, and the markets expect a further cut.

graphic

The Euro Stoxx 50 as the leading index in the euro zone temporarily fell by a good four percent. The MDax of medium-sized market stocks lost more than three percent. The share of the industrial group listed in the MDax Thyssen-Krupp fell temporarily to a record low of minus 5.9 percent at 6.83 euros. The papers close 4.35 percent in minus at 6.94 euros.

Security asked

Investors are clearly looking for security and sending out capital in bonds, certain currencies such as the yen and euro, but also gold. The prices of government bonds from the USA and Germany rose significantly, and their yields fell accordingly.

For example, the yield on ten-year stocks fell on Friday to a record low of minus 0.745 percent. It was below the previous low of minus 0.743 percent last September. At that time, Brexit and the trade dispute between the United States and China had unsettled investors.

Ten-year US bonds also fell to a new record low of 0.67 percent on Friday afternoon. Falling US bond yields are weighing on the dollar and making the euro rise. The single currency rose 0.7 percent and for the first time since July 2019 it again cost more than $ 1.13.

Experts believe that investors’ flight into bonds will continue. “Returns of zero percent are conceivable worldwide,” says Shaun Roach, one of the chief economists at the rating agency S&P Global. Bonds in the amount of $ 14.4 trillion are now yielding negative returns worldwide.

The price of gold rose to $ 1,690 on Friday morning, its highest level in seven years. Commodity analyst Carsten Fritsch from Commerzbank believes that gold should not have seen its high because of the ongoing uncertainties and further falling interest rates. In the early evening, the gold price was $ 1,667.

Corona concern pulls Dax into the red

That too unexpectedly strong increase in orders from industry did not provide buoyancy for the Dax. Orders to companies rose by 5.5 percent compared to the previous month, as the Federal Statistical Office announced on Friday. This is the most significant increase since mid-2014. Analysts had expected an increase of 1.3 percent.

However, economists do not read an upward trend from these numbers, “A silver lining on the order horizon, but unfortunately no sign of a noticeable economic recovery”, says Bastian Hepperle from Bankhaus Lampe. It is encouraging that the situation had improved at the beginning of the year even without large orders. But because of of the corona virus are “further disruptions in the production process and in incoming orders mapped out “.

The chief strategist at Merck Finck, Robert Greil, also believes that growth will continue to decline. “As long as the global spread of corona continues, they should Equity markets continue to fluctuate strongly, “ he says. After all: “The markets already have less economic growth and numerous profit warnings priced inIn addition, in his opinion, that of the US Federal Reserve (Fed) other central banks react supportively, the ECB “next Thursday at the latest,” believes Greil.

Also calculates CommerzbankChief Economist Jörg Krämer that the European Central Bank will decide at its meeting on Thursday to tighten the penalty interest rate for banks. He expects the deposit rate to change to minus 0.6 from the current minus 0.5 percent. In addition, the currency keepers around ECB chief Christine Lagarde are likely to increase the volume of their monthly bond purchases by 20 billion to 40 billion euros for a limited period of six months, for example.

A look at the Dax 30 values ​​shows a concrete indication of the degree of uncertainty among investors due to the economic consequences of the coronavirus epidemic: at the stock exchange launch on Friday were all Dax 30 values ​​in the minus, Were most affected Lufthansa-Titles and shares of German bank, which temporarily lost 6.6 and 5.2 percent of their value. In the afternoon Lufthansa recovered and went out of business with only a slight minus. Deutsche Bank shares closed 3.8 percent in the red.

Aviation and tourism stocks are suffering from the consequences of the virus epidemic. The European industry index falls 3.3 percent to a five and a half year low of 198.92 points. The share of the European aircraft manufacturer airbus fell temporarily by 7.3 percent to a 13-month low of EUR 99.86 and is heading for the largest daily loss in just over five years. Also MTU Aero Engines temporarily lost almost 7 percent in retail and closed 5.3 percent lower at EUR 203.60.

Bank stocks are also in a downward trend due to the corona virus, The European industry index drops 4.3 percent to an eleven-year low of 112.48 points.

Commerzbank already undercut its record low of April 2019 on Thursday, it continues its downward trend today and is temporarily 8.91 percent in the red. At the close of trading, Commerzbank was trading at minus 7.2 percent and EUR 4.30.

Overseers and politicians fear that evacuations and quarantine measures for an economy central functions such as payments or securities trading fail could. Banks are therefore already working intensively on emergency plans to ensure that they remain able to act under all circumstances, even if the epidemic spreads.

But that’s only one part of the threat to European money houses: investors fear that the virus will weigh on banks’ earnings. There is also the risk that The number and volume of loans at risk of default due to a recession increase significantly could.

Because of the corona virus, investors speculate that inflation will remain low and well below the ECB’s 2 percent target. As a result, what was important for the ECB’s monetary policy fell Euro inflation barometer Five-Year-Five-Year-Forward this Friday to a record low of 1.0402 percent, That means investors see inflation – starting in five years – over a period of five years at exactly this percentage.

Opec meeting in Vienna

The Opec summit in Vienna failed. Saudi Arabia was unable to persuade Russia on Friday to propose a cut in funding. On Thursday, Opec demanded a reduction of 1.5 million barrels (159 liters) of oil per day. The partners, including Russia, were to take over 500,000 barrels. Now the alliance of 14 Opec members and their ten cooperation partners is on the brink of extinction.

As a result, panic spread across the markets. The price of Brent oil peaked on Friday afternoon by around eight percent to around $ 45.75 a barrel (around 159 liters). The US variety WTI fell to around $ 42 per barrel. This is the lowest level in around three years.

The background to the required cut in production is the significantly lower oil demand that investors expect due to the Corona crisis. Now there is concern that the Opec + alliance will break up in a dispute between its most powerful members, Saudi Arabia and Russia, said Helima Croft, Opec expert and analyst at RBC Capital Markets. If Russia left the Opec + group, the price could drop.

Look at the individual values

Deutsche Bank: The titles of the largest German money house are falling under the wheels due to the increasing fear of corona virus having a negative impact on the global financial system. On Friday morning, Deutsche Bank stocks temporarily lost 5.2 percent of their value to EUR 6.67. At the close of trading, the shares were down 3.4 percent at EUR 6.77.

Thyssen Krupp: Thyssen-Krupp’s share price fell to a record low on Friday. The group, suffering from high losses, debts and pension burdens, sold its only notable profit maker, the elevator division, for a good 17 billion euros last week. The papers close 4.35 percent in minus at 6.94 euros.

Commerzbank: Just a few weeks ago, Commerzbank and Deutscher Bank papers were among the biggest winners this year. In mid-February, the Commerzbank securities had still cost around 6.80 euros. However, the effects of the corona crisis are particularly heavy on major European banks. Commerzbank shares already hit their record low of April 2019 on Thursday. This downward trend continues today, at times the minus was 8.9 percent and EUR 4.22. At the close of trading, Commerzbank was trading at minus 7.2 percent and EUR 4.30.

Airbus: Airbus gets a month without a new order. The European aircraft manufacturer’s share temporarily fell 7.3 percent to a 13-month low of EUR 99.86, heading for the biggest daily loss in just over five years. The good news is that there were no cancellations in February despite the coronavirus epidemic, writes analyst Sandy Morris from investment bank Jefferies. He also pointed out that in the previous two years there had been several months without new orders. In the evening, the stock was even 7.6 percent weaker at EUR 99.50.

Infineon: At the semiconductor company Infineon could be a planned multi-billion dollar acquisition of the US chip maker Cypress Semiconductor fail. The Committee for Foreign Investments in the United States (CFIUS) raised security concerns and recommended that President Donald Trump prohibit the German company from taking over, the finance agency Bloomberg said, citing persons familiar with the matter. The Infineon share then lost value on Friday and went out of trading at minus 5.5 percent at EUR 16.85.

Lufthansa: Lufthansa shares temporarily lost 6.6 percent of their value. According to a spokeswoman for the company, Lufthansa would like to send employees on forced leave due to the effects of the coronavirus. They are in talks with the Federal Employment Agency. As the airline announced on Friday, more flights than planned are to be canceled. Capacity is to be reduced by up to 50 percent in the next few weeks. In the afternoon, the papers went on a recovery course and closed in the slight minus of 0.2 percent at 11.47 euros.

What the chart technique says

11,624 points – this brand is the focus. Because this number is the correction low, the lowest point since the record high of 13,795 points on February 17. If the leading index does not break this brand significantly, there is a chance of a longer, sustainable bottom from which the prices can rise again. However, this mark was already fallen below on Friday morning, so a further sell-out is likely.

The German stock index is likely to remain outside its normal range for a long time, analyst Andreas Büchler of Index Radar speculates. The risk that the Dax will temporarily fall below the lower limit of its fluctuation margin at around 11,500 points is high. A recovery is overdue in the medium term, but the current trend could continue for a few weeks.

Economic analysts hope for political help

Handelsblatt analyst check: Barclays leaves SAP on “Overweight”

The British investment bank Barclays left the rating for SAP overweight with a target price of 150 euros. Following the fall in the price of the European software sector due to the novel corona virus, investors now have the opportunity to build up positions in shares of companies that shone with long-term growth drivers and attractive future prospects, wrote analyst James Goodman in a sector study available on Friday.

In this context, the expert explicitly named the papers from SAP, TeamViewer and Avast.

Click here for the Handelsblatt analyst check

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