Investors and banks dropped the chain

Dusseldorf The end was sealed shortly before the ghost hour. He decided to “file an application to open insolvency proceedings for insolvency with the Cologne District Court,” said the board of the restaurant chain Vapiano this Wednesday at exactly 11:57 p.m. Whether applications for subsidiaries also have to be made will be examined. Ruth Rigol was appointed as bankruptcy administrator for Vapiano by the Pluta law firm.

This makes it clear that all of the last attempts to rescue the pizza and pasta chain have failed; 55 restaurants in this country alone are likely to remain closed even after the current corona-related forced closure. At first, 2000 employees in Germany have no prospects, and the Danish Vapiano company has already filed for bankruptcy.

It is not yet clear how things will go in other countries. But one thing is certain: the once fairytale-like success story, which culminated with the IPO in 2017, came to an abrupt end.

No solution could be found for the “another significant increase in liquidity requirements of an additional 36.7 million euros”, which arose from the consequences of the corona pandemic, the board said. “In particular, no conclusive agreement could be reached with the financing banks and key shareholders on the contributions to the comprehensive financing solution sought,” it said. For this reason, the prospective funding from state corona aid programs could not be applied for.

There is a lot more to this detail in this sober message. If you ask questions in circles that are familiar with the processes, you hear that in the end it was really only about a few million euros that were supposed to have been in question. An insider spoke to the Handelsblatt of four million euros.

The shareholders, Vapiano co-founder Gregor Gerlach, major shareholders Hans-Joachim Sander and his wife, heiress to Wella Gisa Sander, and a consortium of six banks led by HypoVereinsbank (HVB) could not have agreed on their distribution. Another participant did not want to directly confirm the sum of four million euros, but spoke of a manageable single-digit million amount.

This sum would have remained as a necessary financial injection if Vapiano had received government support. And there were very positive signals from the state of North Rhine-Westphalia for this, confirm several insiders. At the beginning of the week, it had been heard from negotiating circles that possible state support was probably the least problem with the rescue attempts.

State of North Rhine-Westphalia would have jumped in

The state of North Rhine-Westphalia should have provided the majority of the required liquidity of 36.7 million euros through NRW.Bank and taken over the previous Vapiano shareholder Mayfair’s 47.4 percent stake. Mayfair, which is backed by the Tchibo heirs Günter and Daniela Herz, had only recently announced that it would sell its shares to a trustee.

Ultimately, there should have been a violent scramble behind the scenes as to which financial resources banks and investors are making available and who is foregoing certain claims. The dissent was enormous, it was said that the interests of six financing banks and the two investors could not be reconciled.

And ultimately, doubts have grown massively that Vapiano will succeed. Nobody dared to risk a “positive continuation forecast” if the restaurants were allowed to reopen after the corona-related forced closings, which are not yet foreseeable as yet.

Vapiano did not want to comment beyond the ad hoc announcement on request, but again pointed out that there were positive signals “regarding funds from state support programs”. No request has yet been received from the state of North Rhine-Westphalia, also from the investors Gerlach and Sander. Mayfair regretted that despite intensive efforts by the various parties, “the current step of filing for bankruptcy has become inevitable”. HVB did not want to comment on request.

It’s a rather abrupt withdrawal by investors and banks. Because only recently, the stricken restaurant chain announced that they had agreed with the shareholders and banks on a new financing immediately before the escalating corona crisis. 10.7 million euros were identified as liquidity requirements. The plans provided for Gerlach and the Sanders and the financing banks to contribute additional capital.

At the same time, banks’ credit conditions should be suspended. Mayfair, on the other hand, who had already contributed 22 million euros in additional capital in the past two years, no longer participated in these financial injections – and announced that it would transfer its shares to a trustee who, after successful restructuring, might sell them or should retransmit.

Then came the corona pandemic with its impact on the business, which, according to a company announcement on March 16, caused additional financing requirements of EUR 13.6 million. However, the amount has not yet taken into account the impact of the massive closings of restaurants that have become necessary to slow the spread of the virus.

“A further increase in liquidity requirements is therefore expected,” the company said only a few days later when it declared bankrupt on March 20. “We do not know exactly where we are currently and how long the crisis will last,” said investor Sander. He was still convinced of the concept.

Zenith already exceeded at the IPO

In order to ward off the imminent bankruptcy filing, Vapiano boss Vanessa Hall simultaneously made an urgent appeal to the federal government to provide loans quickly. “If we do not soon see unbureaucratic and quick help for the companies concerned, the loss of jobs will no longer be an abstract risk, but will inevitably become a reality,” said Hall.

The British came to Vapiano in 2018 and should lead the weakening restaurant chain back on the road to success. In 2005, Vapiano passed the 10 million euro mark for the first time, then expanded with giant strides. At the top, the chain was represented in 33 countries with more than 230 restaurants, the turnover moved towards 300 million euros. And since 2017, the pizza and pasta specialist was listed on the stock exchange.

But when the chain, which had become a cult brand, went onto the trading floor, the descent had long been initiated. There were reports of poor hygiene, problems in dealing with employees. Above all, the criticism of long waiting times and the price-performance ratio in the restaurants and the associated weaker business weighed on Vapiano. After a minimal profit of 1.6 million euros in 2017, the loss was 101 million euros a year later.

At least not directly affected by the bankruptcy are the franchisees who operate 29 restaurants in 25 German cities. They had stressed just over a week ago that they were fully solvent. However, their restaurants, which are supplied by third-party companies and not via Vapiano, are currently also closed due to the state-imposed restrictions on public life. And what happens next is more than questionable. Because important components of their appearance on the market came from Vapiano: Finally, the restaurants adopted the Vapiano marketing concept and used the brand.

More: At Vapiano, the corona crisis has brought an already shaky business model to collapse

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Deutsche Bank is considering short-time working

“At the operational level, the bank is preparing for such scenarios.” As of today, however, there was no short-time working within the institute.

Individual Volksbanks and Raiffeisenbanks are also considering registering short-time benefits. “Wherever it can not be avoided, cooperative banks take this step to preserve jobs,” said a spokeswoman for the Federal Association of Volks- und Raiffeisenbanken (BVR).

The move would be a novelty for the banking industry. “Short-time work is something completely new and unknown to banks. In any case, I know of no cases in my 35 years of professional experience, ”said Stephan Szukalski, Federal Chairman of the DBV banking union.

Short-time work is generally used by companies such as car manufacturers or mechanical engineers to survive an economic downturn without having to fire employees. The federal government has recently expanded short-time working opportunities due to the corona crisis.

“We know of a number of Volksbanken and Raiffeisenbanken that have already applied for short-time work,” said Szukalski. “Many more – as well as most of the big banks – at least that is our assessment. We will follow suit at the latest in the course of the next week.”

The employers’ association of the private banking industry said that, to the best of its knowledge, there has been no short-time working at German banks. “Of course, companies have to prepare for the fact that short-time work may also be necessary in certain areas,” said a spokesman

Banking expert Jan Duschek from the Verdi union explained that the closure of branches as a result of the Corona crisis is not a prerequisite for applying for short-time work. There are already possibilities in the collective agreements as well as in internal regulations to manage fluctuations in the volume of work and to secure employment.

According to insiders, possible forced holidays at banks are not about tens of thousands of employees, for example Volkswagen, Fraport or Lufthansa. Only a few areas of the institutes in the private customer business are affected, such as processing, marketing or in the branches.

“So far, short-time working has been purely hypothetical, but if the pressure from the corona crisis persists, you need to be prepared,” said a person familiar with the matter. For example, internal company agreements would be changed or adapted in order to be able to react quickly in an emergency.

The Deutsche Bank and the Commerzbank Both are currently in the middle of the corporate restructuring and are cutting thousands of jobs. That costs them a lot of money; Deutsche Bank alone has budgeted more than seven billion euros for this.

If branches remain closed for a long time due to the Corona crisis or if the business is idle in some areas, this increases the pressure on costs even more. Short-time working regulations can save costs, since the Federal Employment Agency pays 60 percent of the lost net wages.

The situation for German commercial banks is currently divided. For one thing, the wires in the corporate customer departments are running hot because thousands of companies are applying for KfW aid loans through their house banks because of the corona crisis.

Many employees worked overtime because of this, the unions said. “We see a huge need for advice from our customers. Therefore, the question of short-time work is currently not being asked, ”said Commerzbank private customer boss Michael Mandel of the Reuters news agency. On the other hand, more and more branches are being closed because people no longer go out of the house or employees at the banks have contracted the virus.

UniCredit subsidiary HypovereinsBank (HVB) now only has around 30 percent of its 337 branches in Germany open. Nevertheless, all employees are fully committed to the customers. “Short-time work is not an issue for us,” said a spokeswoman.

Deutsche Bank closed more than 200 of its more than 500 locations last week and is currently not planning any further closures. Commerzbank also thinned its branch network by around 160 branches. The employees are increasingly advising on telephone or video calls. Self-service zones at the banks are still open.

More: The rating agency Moody’s fears damage to the European financial system due to the corona crisis. Despite aid programs, the environment will deteriorate significantly.

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Banks are rushing for KfW emergency loans

Frankfurt In the corporate customer business of Commerzbank There has been a state of emergency for a few days. Employees receive more credit requests via email and phone than ever before. Divisional CEO Oliver Haibt says: “The number of inquiries is currently more intensive than at the beginning of the financial crisis in 2008 and 2009.”

Since the past week, Commerzbank has received “a high four-digit number” of financing requests from corporate and entrepreneurial customers in the course of the corona crisis, explains Haibt. A good third of them meet the requirements of the state development bank KfW, which assumes a large part of the credit risk as part of aid programs.

If it is particularly urgent, Commerzbank makes advance payments and pays companies loans within a day. “This is possible because we as the house bank have known the companies and their business models for years.”

The Deutsche Bank, the largest German money house, also registers enormous interest. Already on Monday she had received more than 5,000 inquiries about corona. A bank spokesman said approximately 2,000 customers had made specific requests for KfW’s emergency loans. The first promotional loans have already been approved.

The big rush is also coming to KfW. The state bank itself said that it had received a total of 34 applications with a loan volume of almost two billion euros by Tuesday 12 noon. The lion’s share is accounted for by four large applications with a total volume of EUR 1.985 billion. A spokesman said that 30 applications were loan amounts of up to three million euros. The volume of these applications amounts to 17 million euros.

KfW special loans are intended to dampen the consequences of the corona crisis. Companies have been able to apply for these funds since Monday, and the first emergency loans were granted on Monday. They are part of the rescue package to combat the corona crisis that the federal government has just decided on. In total, it comprises the gigantic sum of 1.2 trillion euros.

This is the corona protective shield for the German economy

The KfW’s new loans are intended for companies that are temporarily experiencing financial difficulties due to the rapid spread of the corona virus and need liquidity to bridge the gap. Working capital and investments can be financed with the loans, which are guaranteed up to 90 percent by the state. KfW normally only promotes investments with its programs and shares the credit risk with the house bank in half. The funds are often discounted. In parallel, there are bridging or liquidity loans from the development banks of the individual federal states.

Full order books

In some cases, corporate customers had already tried to get KfW loans last week. “We already had a full ‘order book’ from the previous week, which will now be given to KfW as soon as possible,” says Stephan Ortolf, head of corporate banking at the top cooperative institute DZ Bank.

Numerous money houses report enormous demand. This also applies to private banks like Hypo-Vereinsbank, HSBC and BNP Paribas and for the German savings banks, which are market leaders in business with medium-sized companies. At Hamburger Sparkasse, for example, one of the largest of the 380 savings banks, several hundred inquiries for immediate funds and promotional loans were received on Monday alone. Other large savings banks report similar figures.

According to the German Savings Banks and Giro Association (DSGV) – similar to Commerzbank ¬, public-law credit institutions have partly made advance payments and paid out promotional loans, although the funds are only made available to KfW later. Deutsche Bank also offers customers bridging financing for loan amounts of up to three million euros, for which KfW leaves the risk assessment of customers to the house banks alone, even before the loans are officially available in April.

Not only is there a great demand for aid loans, there is also a great need for information about Corona. Deutsche Bank has set up a Corona Helpdesk that answers questions from customer advisors across the board – from questions about new bankruptcy law, short-time work benefits to emergency loans. The DSGV also registered “a very high volume of information requests and advice needs of affected companies” immediately after the start of the new funding programs.

Banks praise the form of aid: “The KfW programs are very flexible. They are strongly oriented towards the 2008 programs, but are being handled even more pragmatically, ”says Andreas Voglis, co-head of corporate customers at the HSBC money house in Düsseldorf, with a view to government aid during the financial crisis a good ten years ago.

How quickly companies get a KfW loan also depends on the size of the desired loan. With sums between three and ten million euros, the development bank checks faster than usual. According to financial circles, KfW endeavors to process a maximum of five working days.

In order to be able to help quickly, Commerzbank has set up an internal special fund with a volume of EUR 700 million in addition to the KfW programs. “We use this liquidity to pay out loans directly when necessary,” reports Jan Rolin, who is responsible for larger companies as the divisional board member.

There is a need for this. “There were already a handful of companies where the situation was so serious that we decided within a day and paid the loans immediately,” says Rolin. Most inquiries come from small companies and medium-sized companies with a turnover of between 15 and 500 million euros. Large corporations, on the other hand, have not yet applied for KfW loans.

Difficult considerations for banks

Observers are confident. Markus Berg, partner in the consultancy Berg Lund & Company and expert for regional banks, said: “The Sparkassen-Finanzgruppe and the cooperative financial group are very determined. As far as I can see, everyone in the two groups is pulling together – and at high speed. ”

Nevertheless, according to Berg, the money houses are sometimes faced with difficult considerations, even if they only take ten or 20 percent of the risk with the new KfW loans. “There are business models where it was questionable whether they were sustainable even before the crisis,” he says. “In such cases, the banks will usually choose not to finance it with KfW loans. Only grants can help the companies here. “

Handelsblatt Morning Briefing - Corona Spezial

Commerzbank also makes this clear: “Of course, as a bank we have to carry out an individual risk assessment for financing inquiries and decide whether a business model is sustainable,” says corporate client manager Haibt. “We continue to have this responsibility as a bank.”

In addition, there are still unanswered questions about the cases in which KfW aid is effective. This applies, for example, to companies that have chosen leasing as a financing alternative. Kai Ostermann, head of the market leader Deutsche Leasing, said: It is currently not clear whether and how this will be taken into account in KfW’s aid programs. He demands “to open all programs and measures for leasing”. Deutsche Leasing belongs to the savings banks.

More: Solo self-employed and small businesses should receive up to 15,000 euros in emergency aid

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Consumers are increasingly paying for purchases in the corona crisis by card

Frankfurt Retailers’ requests are urgent at the moment: They are asking their customers to use payment methods that are as contactless as possible. “Card payment or Payback Pay” is what the organic supermarket Alnatura wants. In fact, a number of consumers seem to respond to such requests. For example, the Volksbanks and the savings banks are already seeing an increase in transactions using a Girocard, i.e. an EC card.

Given the increasing spread of the corona virus, retailers want to protect their employees, but customers also prefer to keep their distance. And they want to hold as little cash in their hands – assuming that they could become infected with the corona virus through bills and coins. However, Bundesbank board member Johannes Beerman countered this concern on Tuesday: banknotes and coins pose no particular risk of infection, he said.

The current situation nevertheless gives the cashless payment methods an upswing. And the banks benefit from this because they collect a fee from the merchants when paying by card. The Federal Association of Volks- und Raiffeisenbanken (BVR) said with regard to the past seven days, one sees more Girocard transactions. However, he could not give exact numbers. A BVR spokesman emphasized that the systems were stable and could also process significantly more transactions.

The savings banks, which are market leaders in Germany, referred to the increased use of the Girocard. The president of the German Sparkassen- und Giroverband, Helmut Schleweis, said about the amount of cashless transactions: “We see generally strong numbers.” And also the online bank Comdirectthat for Commerzbank heard a plus in card payments for March.

The savings banks would recommend their customers to pay as contactlessly as possible, says Schleweis. You have to hold the checking or credit card close to the card terminal of the cash register, there is no need to insert it. For purchases up to 25 euros, the PIN entry on the card terminal is not necessary.

Contactless payments are becoming more popular

This contactless payment is now gaining in popularity. The Hypo-Vereinsbank (HVB), for example, registers that “the dynamic of growth in contactless payments has increased again in recent weeks”. According to the German banks, 75 million of the over 100 million Girocards were last equipped with the contactless function. The trade enables fast payments at almost 755,000 terminals. A small wave symbol indicates that the card supports the function.

In view of the corona crisis, it would be advantageous if the amount limit for PIN-free transactions were raised. But that’s not so easy: The German banking industry, the joint advocacy group of the German banking associations, refers to the requirements of the EU Payment Services Directive PSD2 for so-called strong customer authentication. For example, consumers have to re-authenticate themselves by entering their PIN if they have paid for a total of EUR 150 without entering their PIN on previous purchases.

Pay without touching with your smartphone

You can pay by smartphone without entering a PIN on the card terminal at the checkout. The Payback bonus program currently describes the use of its Payback Pay smartphone payment system as “very, very high – at Christmas level”. Users open their smartphone app at the cash register, receive a QR code and scan it at the cash register – without the cashier having to take the device in hand or having to enter a PIN at the cash register terminal.

The company also reports an unspecified increase in new registrations for Payback Pay. The extent to which the “hamster purchases” of many consumers have an impact on increased use has not yet been evaluated. Overall, the company speaks of “several hundred thousand payback pay users”.

The payment services of Apple and Google, Apple Pay and Google Pay. They have been available at some German banks since June and December 2018, respectively. Both tech groups do not want to name transaction or user numbers. But HVB has seen further growth in Apple Pay in the past few days. Comdirect also notices that payments via Google Pay and Apple Pay are increasing.

The German savings banks, in turn, are very satisfied with the use of Apple Pay. Joachim Schmalzl, board member of the German Savings Banks and Giro Association (DSGV) said that there was “very high demand”. The savings banks have been offering Apple Pay since last October. So far, Apple Pay customers can only use one card from credit card companies Mastercard and deposit visas, but not the Girocard, which is much more popular in Germany.

According to Schmalzl, the savings banks are working flat out to ensure that their customers can also deposit the Girocard with Apple Pay. “We are very confident that we will get this done this year,” said the DSGV board.

The cooperative banks, on the other hand, have not yet started using Apple Pay and have not yet given a start date. But you want to start soon, according to the BVR. The Volks- and Raiffeisen banks had actually wanted to offer Apple Pay in 2019, but had announced at the beginning of December that the start would be postponed to 2020.

More: Why the Bundesbank sees no dangers to cash supply.

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The head of Deutsche Börse is to become the supervisory board of Deutsche Bank

Frankfurt The Deutsche Bank wants the CEO of the German stock exchange, Theodor Weimer, be elected to the Supervisory Board. Weimer is to replace Katherine Garrett-Cox, who will step down at the shareholders’ meeting, like Deutsche Bank with publication of their annual report announced.

“With Theodor Weimer, who is to move into the supervisory board, we gain an expert in the German and European financial industry and an outstanding banker for the supervisory board of Deutsche Bank”, said Paul Achleitner, the chief controller of the bank.

The personnel is significant: With Weimer, a candidate has been moving into the bank’s supervisory board for the first time in a long time, which has the format to replace Achleitner at the head of the committee after his contract expires in spring 2022.

However, it is also clear that Weimer would have to give up his senior position at Deutsche Börse early if he wanted to become chief controller of Germany’s largest money house. “As long as Mr. Weimer is chairman of the board of the German stock exchange, a position as head of the supervisory board is out of the question,” said a spokeswoman for the stock exchange. Weimer should move as a simple member to the supervisory board of Deutsche Bank, she emphasized. “The question of the chairmanship of the supervisory board does not currently arise.”

According to financial circles, Weimer received the green light from the head of the German Stock Exchange, Joachim Faber, for the candidacy for the Deutsche Bank supervisory board. Within the company, many hope that the CEO will fulfill his contract, which will run until the end of 2024 – after all, he only extended the contract in mid-February.

Experts warn of conflicts of interest

Weimer is very well connected in politics and the financial sector. He also worked for many years in management positions at banks, for example as head of the UnicreditSubsidiary Hypo-Vereinsbank or as a partner of Goldman Sachs in investment banking.

For experts, there is no question that he, as a member of the Supervisory Board, is a technical asset for Deutsche Bank. “Even if I do not like to comment on names, but it is an excellent choice !!!”, banking professor Sascha Steffen commented on Twitter. “We see Mr. Weimer’s nomination as fundamentally positive, because he has the necessary industry expertise and a high reputation,” said Vanda Heinen, an analyst specializing in corporate governance at Union Investment. “In order not to be accused of accusing the office, Mr. Weimer should resign from the supervisory board of FC Bayern Munich,” she warned.

Other experts warn that there may be conflicts of interest because Deutsche Bank is a major customer of Deutsche Börse. As head of the stock exchange, Weimer is very interested, for example, that Deutsche Bank will in future process more derivatives transactions in Frankfurt than in London.

“Theodor Weimer is undoubtedly an asset to the Supervisory Board of Deutsche Bank. But as long as he is the head of Deutsche Börse, this is a crystal-clear conflict of interests, ”said Ingo Speich, head of sustainability and corporate governance at Deka Investment, the Handelsblatt. The head of the exchange must be as neutral as possible.

It is unclear whether and how this finding will affect Deka Investment’s voting behavior at the Annual General Meeting. “We are examining whether and what that means for our voting behavior at the Deutsche Bank Annual General Meeting,” said Speich. Deka is one of the top 20 investors in Deutsche Bank.

“The question of a possible conflict of interest should have been clarified in advance with the supervisory authorities so that the Zeltner case does not repeat itself,” said Union Investment expert Heinen. Financial circles say that Deutsche Bank discussed the personnel with the supervisors before the announcement. In addition, the stock exchange is not a direct competitor of Deutsche Bank, so any conflicts of interest can be managed without major problems. A taste would probably still remain with some decisions.

Deutsche Bank has recently had bad experiences with conflicts of interest on the Supervisory Board. Jürg Zeltner, former head of wealth management at UBS, had to say goodbye to the control committee again after a few weeks. The supervisors had put pressure on him because Zeltner worked as a boss and investor at the Luxembourg private banking group KBL for a direct competitor of the Frankfurt money house.

The rumor that Weimer could one day succeed Achleitner has been circulating in Frankfurt for many months. When Weimer was contacted internally at Deutsche Börse, he reacted annoyed. At the annual press conference in February, he said he hadn’t thought about what to do after his contract expired in 2025. “I don’t have that much strategic thinking on my own behalf.”

The top earner receives 13 million euros

Weimer joins Deutsche Bank in a phase in which it is part of the largest corporate restructuring in its history. 18,000 jobs are to fall victim to this. The bonus pool for employees has also been reduced. The bank will pay a total of 1.5 billion euros in bonuses to its approximately 88,000 employees for the past financial year, as the bank’s annual report shows. That is around 22 percent less than the 1.9 billion euros for 2018.

However, Deutsche Bank has already fired many of the usually high-paying investment bankers. This is another reason why the bank has 583 fewer income millionaires than a year ago. At that time, 643 employees received total remuneration of more than one million euros.

A German banker – who is not mentioned by name in the annual report – no longer has to worry about the unpredictable consequences of the corona virus for Deutsche Bank and the entire financial industry: his total remuneration for 2019 amounts to more than 13 million euros.

The total salary of the anonymous top earner is thus as high as the total variable remuneration of the Executive Board in the past year. Despite the loss of billions in 2019, the bank’s management board will receive a total bonus of EUR 13.3 million, which is around half as much as in the previous year when the top managers received EUR 25.8 million in bonuses. Including fixed salary and allowances, the board of directors received 34.8 million euros from CEO Christian Sewing after 52.2 million in the previous year. Sewing itself received five million euros – two million less.

There will be no vote on the remuneration system at the Annual General Meeting this year. This is due to the new shareholder rights guideline, which only came into force in December 2019 and necessitates adjustments to the remuneration system. At the 2021 shareholders’ meeting, the Supervisory Board will then let the shareholders vote again on the compensation structures.

Little news about Corona

The statements made by the bank in its annual report on the corona crisis and its economic impact were less informative than the personnel decisions. The term Covid-19 occurs exactly 31 times on the 517 pages. However, the letter from CEO Christian Sewing only says: “The positive trend of the fourth quarter of 2019 continued at the start of the year. However, what the Covid 19 pandemic means specifically for the global economy and for our bank cannot be predicted at this point in time. ”

The bank’s perspective is at least a little more specific. The money house there warns that “we can be significantly affected by a sustained downturn in local, regional or global economic conditions”. Given the uncertainty about the spread, duration, and market impact of Covid-19, the forward-looking assumptions currently did not take into account any potential impact.

In the past year, the radical reconstruction caused a loss of 5.7 billion euros. Sewing had promised investors a black zero for operating profit in 2020, but that was before the pandemic questioned all plans.

More: Deutsche Bank under stress: Corona crisis makes conversion a race against time.

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Corona virus: stock market crash 2020: how secure is the world financial system?

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Harbarth: Constitutional judge with a controversial past

Dusseldorf His appearance was very presidential, almost statesmanlike. In a blue suit, white shirt and blue tie, the microphone in his hand, Stephan Harbarth stepped in front of the camera to congratulate the constitution on his 70th birthday. Harbarth was not long in the office of Vice President of the Federal Constitutional Court – at the Schlossplatz in Karlsruhe in late May 2019 the anniversary of the set of rules that the 48-year-old had promised to protect was celebrated.

The video can be found on the Internet, in a soft but firm voice the Baden native speaks of the best condition “we have ever had”. And that he wished the Basic Law a good time, “also in the coming decades”.

Whether this happens depends on Harbarth himself. It is now agreed that he will shortly be chosen as the new president of the highest German court. However, his past is currently weighing heavily on the Karlsruhe constitutional authorities. Since the beginning of his proclamation as constitutional judge, critics have emphasized that Harbarth, as a former lawyer and CDU politician, cannot act neutrally.

His new employer is in a tricky situation. In Karlsruhe there is a constitutional complaint against his appointment in November 2018, a decision will be forthcoming shortly. A second was discarded on Wednesday.

In addition to questions about its independence, it deals with the following fundamental issues: Are politicians and lawyers, who are classic interest groups, transferred to a court, and even the highest German, right? And which measure of independence must apply? Doesn’t a constitutional judge have to rule out the appearance of dependency?

Two of Harbarth’s biggest opponents are lawyers from their own party: Cologne law professor Heribert Hirte and Cologne lawyer Claus Schmitz.

Did shepherds have to go because of Harbarth?

The 61-year-old shepherd sits for the CDU in the Bundestag – and is now, after the election of the AfD man Stephan Brandner, provisional chairman of the legal committee. He is a law professor at the University of Hamburg – and was co-editor of the “Zeitschrift für Firmenrecht” (ZGR), which has been published since 1972, and was the main patron of its international counterpart ECFR.

The two periodicals are considered the leading figures in the scene. In addition to well-known names such as Wulf Goette or Gerd Krieger, Hirte was a member of the editorial group – until he was excluded there and Stefan Harbarth was accepted. Shepherd cannot understand this and is now fighting in front of the Karlsruhe Higher Regional Court against his exclusion from the committee, which he considers ineffective.

Did shepherds have to go because they wanted to make room for the future constitutional judge Harbarth? The office of chairman of the 1st Senate in Karlsruhe and thus of the potential new president could only be awarded with the blessing of Chancellor Angela Merkel.

And when the discussion about this position began in 2017, Harbarth surprisingly appeared as Merkel’s place neighbor at the CDU / CSU Group’s Christmas party at the time. The “world” then reported that Harbarth was apparently chosen “for higher things”.

The newspaper for corporate law, however, contests a plan for the admission of the future constitutional judge Harbarth. Peter Hommelhoff, former rector of Heidelberg University and co-editor of ZGR says: “When Harbarth was appointed in June 2018, the other editors were not aware that he would be appointed to the Federal Constitutional Court at the end of 2018.”

Doubts about the appointment as honorary professor

Claus Schmitz, on the other hand, believes that Harbarth received questionable help on the way to Karlsruhe. Gray suit, light gray shirt and CDU party book – the 38-year-old lawyer openly opposes Harbarth because he is “worried” by his appointment. Schmitz’s law firm HMS Barthelmeß Görzel is in the heart of the cathedral city, he is behind the constitutional complaint against Harbarth that the constitutional court did not accept for decision.

Reason: Schmitz himself is not directly affected by Harbarth’s appointment. “It is hard to understand that such an important topic is dismissed with four lines,” says Schmitz.

He does not see himself as a nest polluter within his party. “If I believe in a legal system, it always has to work,” says Schmitz. He continues to believe that Harbarth’s appointment is not lawful and believes that Heidelberg University paved the way for Harbarth University by awarding him the title of honorary professor in March 2018.

Lawyer Schmitz therefore turned to the university to clarify why and by whom Harbarth became an honorary professor there. However, the university refuses to give him the names of the two external reviewers who support the professorship, as well as access to the reviews.

The university also relies on confidentiality vis-à-vis the Handelsblatt – “in the interest of the open word in academic appointment and appointment procedures”. Talks prior to the appointment were “not known” to the law faculty.

Regarding the motivational situation, it is said that Harbarth has worked as a lecturer and lecturer for the university since 2004. And he corrected exam exams. On the basis of this longstanding, “outstanding commitment”, the Faculty Council of the Faculty of Law unanimously decided in February 2017 to propose Harbarth as an honorary professor.

Assumptions about interconnections

Is Schmitz right if he doesn’t believe in coincidence? The silence of Harbarth’s assessors by the University of Heidelberg does not help to dispel suspicions about interrelationships – especially since there is an obvious financial and personnel proximity of the university to Harbarth’s former law firm SZA Schilling Zutt & Anschütz from Mannheim.

The law firm and the university not only created the Wolfgang Schilling Foundation together – for one of the firm’s founding fathers, who was himself an honorary professor in Heidelberg. Since then, symposia have been held jointly with the participation of law firms and Heidelberg legal scholars.

With Thomas Liebscher, another SZA partner is an honorary professor at the university. The emeritus Heidelberg university professor Peter Ulmer was a member of the law firm’s supervisory board for a long time. Both were not involved in the process for Harbarth’s appointment, the university said.

The law firm SZA is also a sponsor at the chair for German and European business law. “Incoming payments from SZA were recorded for 2015, 2016, 2017 and 2019. They each amounted to 1,000 euros, ”says the university.

Even if you consider all of this to be a coincidence: the Harbarth Causa also puts the Federal Constitutional Court in an awkward position due to the constitutional complaints. If the second complaint is also perpetuated without a great reason, it is accused of not taking the issue seriously.

Even the attitude of the still-president Andreas Voßkuhle is questionable. Attorney Schmitz had made an application to take Vosskuhle out of the Harbarth trial for bias. But Vosskuhle’s Senate has now put an end to this – with Voßkuhle’s participation. In mid-2019, he had given his opinion in an unusual way about his position on Harbarth’s appointment.

With regard to his potential successor, Voßkuhle emphasized that it is good for the court to have one or two people in his ranks who understand politics.

Collision point with the judge’s office

Harbarth’s work as a politician and lawyer is currently a central component of the constitutional complaints. As a legal and domestic politician, it was Harbarth’s job to comment on and initiate legislative proposals – a point of conflict with the judge’s office, since laws are often reviewed at the constitutional court – as a last resort.

Before moving to court, Harbarth also worked in the front line for the large law firm SZA Schilling Zutt & Anschütz. First as a board member, later after a change of form as its managing director. Slogan: “Companies come to us”. Examples for SZA clients: Heidelberger Druckmaschinen, BASF, HVB, BayernLB or the supervisory boards of Deutsche Bahn and von Innogy. Harbarth’s clients included CropScience, Südzucker and Daimler.

His former law firm also advises Volkswagen. SZA still represents the carmaker in the diesel scandal against potentially damaged investors. VW shareholders are demanding around nine billion euros in damages because, in their opinion, the company informed the diesel scandal too late and the fall in the course caught them cold.

Harbarth did not appear in the mandate itself, and SZA emphasized when asked that he had not been involved with client VW. But his partners Markus Pfüller and Thomas Liebscher. Harbarth therefore also benefited from the Volkswagen fees. As a legal politician in the Bundestag, he also represented positions that may well have been in the interests of the group: In the discussion about the model declaratory action – a kind of Lex VW, with which damaged VW buyers are now taking action against the group – Harbarth spoke against class action lawsuits with punitive damages out.

In addition to the Cologne lawyer Schmitz, the law firm Dr. Stoll & Sauer went to Karlsruhe – on behalf of two Volkswagen customers and one shareholder. The firm is best known for representing thousands of drivers against companies like Volkswagen and Daimler in the diesel scandal. “I am very concerned that the appointment of Stephan Harbarth could lobby lobbyists from the automotive industry directly influence the court,” says lawyer Ralph Sauer. Lobbyists would undermine fairness and equal opportunities in society.

Harbarth has so far defended himself by saying that anyone who wants lawyers in Karlsruhe should not complain that their law firms also have clients. Was he ever involved in the VW mandate? Harbarth also says no.
Is that crucial? Harbarth was the executive board or managing director of the law firm.

Isn’t that enough for the appearance of dependency? Léa Briand from MP Watch sees a clear conflict of interest: “It doesn’t matter that Harbarth said he wasn’t personally involved in the VW case at the firm. As a board member, he has to protect the interests of the law firm – and ultimately that of the clients as well. “

The lawyer Schmitz’s constitutional complaint finally came up against something else. Harbarth was one of those MPs who, on the side, received substantial sums from their legal work. Exactly how much Harbarth collected and for what is not known.

Annual income of over one million euros

By law, he is only obliged to classify additional income in a fee class. According to the “Spiegel”, Harbarth is said to have generated annual revenues of over one million euros. Neither Harbarth nor SZA wanted to say anything about it. His law firm’s annual reports indicate that he was “full time” there.

According to the Members’ Act, he is not authorized to do so, Schmitz and Sauer. The law only allows sideline work. “The exercise of the mandate is the focus of the activities of a member of the Bundestag,” says the Members’ Act. So what did Harbarth get his high compensation for? Neither those who chose him as a judge, nor those who sit next to him on the bench or judge Harbarth know that.

The first lines of conflict have already emerged – albeit in other areas. Harbarth’s Senate will soon have to decide on the new law to combat child marriage. Harbarth, as a politician, had campaigned intensively for a ban on such marriages and, according to his own statements, had “been intensively involved in the preparation and passing of the law”. His senate, however, released him from bias – if not unanimously.

The same was true of a law on drastic cuts in Hartz IV benefits – for example for missed appointments or rejected jobs. Harbarth had voted for these tough sanctions as a politician. Despite criticism from politics and the media, he stayed on board with this decision.

President Voßkuhle apparently doesn’t find all of this so dramatic. The office of constitutional judge could also change people. Vosskuhle once said that he had seen very conservative people quickly become liberal judges.

Schmitz and Sauer don’t want to rely on it. They are convinced that Harbarth, as a long-standing corporate lobbyist and CDU member of the Bundestag, is the wrong choice for the Federal Constitutional Court.

More: The new constitutional judge Stephan Harbarth is highly praised, but not without controversy: some see the economic interdependencies of the top lawyer as problematic.

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Coronavirus weighs on equity markets – Dax closes below 13,000 points

“The corona virus shows the vulnerabilities of a globalized economy and could lead to companies possibly producing more at local levels in the future,” says Philippe Waechter, chief economist of the French investment company Ostrum Asset Management. Against this background, the virus could prove to be a “game changer” in the long term.

The economic worries are also noticeable in the USA. The Dow Jones slid a little more than 1000 points on Monday.

The Asian stock exchanges had a similar start to the week: South Korea saw the largest price slide in one and a half years. The Korea Composite Stock Price Index (Kospi) of the Seoul Stock Exchange temporarily fell by almost four percent on Monday to a two-and-a-half month low of 2,079 points.

The Shanghai Stock Exchange was only slightly down at 3,030 points. Here, the renewed commitment by Chinese President Xi Jinping to stimulus packages stabilized the prices. The Japanese stock markets remained closed due to a holiday, as did those in Russia.

Speculation that global oil demand could weaken significantly sends the price of the energy carrier down. Brent from the North Sea is cheaper by 3.6 percent to $ 56.41 a barrel.

Gold is becoming more expensive

The “safe haven” gold is benefiting from this development. The price of the precious metal rises 1.86 percent to a seven-year high of around $ 1674 per troy ounce and is heading for the biggest daily profit in seven months.

Investors in the bond market took federal bonds and pushed the yield on ten-year securities to their lowest level in more than four months.

By contrast, Italy’s ten-year bond yield jumped more than eight basis points to 0.997 percent, the highest level in more than two weeks. The gap to yields on German government bonds was around 145 basis points, the largest since the end of January.

The effects of the virus were also noticeable on the foreign exchange market: the euro exchange rate increased. In the afternoon, the common currency was $ 1.0854. In the morning, it was just above $ 1.08.

With the economic data on Monday, stock marketers turn their attention to the Ifo index. Despite the coronavirus epidemic, the mood in the executive floors of the German economy brightened slightly in February. The barometer rose surprisingly to 96.1 points from 96.0 points, as the Munich Institute announced on Monday in its survey of around 9,000 managers. Economists surveyed by Reuters, however, had expected a drop to 95.3 points.

On the German market in particular, shares sensitive to the economy came under pressure. Bank prices in particular slipped. The share certificates of German bank lost more than five percent and at the end of the MDax, the shares of the Deutsche Pfandbriefbank collapsed by almost nine percent. There were also disproportionate losses for car values.

Look at the individual values

Lufthansa: The international aviation association Iata estimates the industry’s loss of earnings due to the corona virus at nearly $ 30 billion, or three percent of total revenue. But things could get worse as the 2003 Sars scenario is expected. In Asia, South Korean and Asiana stocks lost more than five percent each, while Australian Qantas lost over seven percent. Also the Lufthansa slips by 8.8 percent.

Unicredit: According to an insider, Jean Piere Mustier, head of the Italian financial institution, remains with the major Italian bank. Unicredit would like to inform you shortly that Mustier of the HVB mother will be preserved. The bank declined to comment. According to insiders, Mustier was considered a candidate for the top post at the British money house HSBC, to whom the current head of transition Noel Quinn has ordered a tough austerity course. However, the share cannot benefit from the news in the weak stock market environment and falls by 4.1 percent.

Thyssen-Krupp: In the multi-billion dollar bidding race for the elevator division, the employee representatives obtained commitments from the competing finance consortia to secure employment. “With these fair and best owner agreements, we were able to take an elementary step into a secure elevator future,” said North Rhine-Westphalia’s IG Metall boss Knut Giesler. The stock loses 2.8 percent.

car values: The bad China business and the economic uncertainties are particularly troublesome for the auto companies. BMW was down 4.8 percent on Monday evening, Volkswagen by 5.4 percent and Daimler even 6.7 percent in the red.

What the chart technique says

After Monday’s price slide, investors may have to think about 13,000-point rates, possibly as high as 12,795 points. Since the beginning of November last year, the leading German index has found several stops at around 13,000 points. According to chart technology, this area is an important support. Only in December did the Frankfurt benchmark drop briefly to 12,795 points.

Before investors can think about rising prices again, the German stock market barometer must first close today’s downward price gap. Such downward price gaps arise when the daily low of the previous day is higher than the daily high of the subsequent trading day. Specifically: last Friday the lowest price was 13,500 points, the highest price today was from 13,236 points.

If the Dax could establish itself sustainably above 13,500 points, that would be the first important technical improvement.

“The markets have been too carefree with the corona virus”

Handelsblatt analysts Check: Baader Bank increases target price for the puma share

Baader Bank raised the price target for Puma SE from 82 to 90 euros according to figures and a conference call, but left the rating on “Add”. The sporting goods company remains on course for growth and has set a confident tone in the conference, wrote analyst Volker Bosse in a study available on Friday. He justified the higher price target with generally higher valuations in the market environment.

A total of 28 studies in the Handelsblatt analyst check deal with the Fresenius-Medical care shares. The “Hold” advice is countered by 17 buy recommendations. Two analyzes recommend selling the paper.

The weighted price target for all analyzes is 81.00 euros, which is above the current price of around 78.20 euros. With a weighted price target, recent studies have a higher impact.

Click here for the Handelsblatt analyst check

Here is the page with the Dax courses, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,

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Coronavirus is messing up the financial markets – Dax is slipping significantly

Dusseldorf The spread of the corona virus and concerns about the consequences for the global economy have the stock exchanges under control. Since Dax-All-time high of 13,795 points on February 17, sales of the stock market dominate the action.

The rapid spread of the corona virus outside of China unsettles investors and has an impact on almost all markets. In Italy, for example, around a dozen cities were cordoned off.

“The corona virus shows the vulnerabilities of a globalized economy and could lead to companies possibly producing more at local levels in the future,” says Philippe Waechter, chief economist of the French investment company Ostrum Asset Management. Against this background, the virus could prove to be a “game changer” in the long term.

In Asia, some stock exchanges started the week with severe losses on Monday. South Korea saw the biggest drop in price in a year and a half. The Korea Composite Stock Price Index (Kospi) of the Seoul Stock Exchange temporarily fell by almost four percent on Monday to a two-and-a-half month low of 2,079 points.

The Shanghai Stock Exchange was only slightly down at 3030 points. Here, the renewed commitment by Chinese President Xi Jinping to stimulus packages stabilized the prices. The Japanese stock markets remained closed due to a holiday, as did those in Russia.

Speculation that global oil demand could weaken significantly sends the price of the energy carrier down. Brent from the North Sea is cheaper by 3.6 percent to $ 56.41 a barrel.

Gold is becoming more expensive

The “safe haven” gold is benefiting from this development. The price of the precious metal rises 2.6 percent to a seven-year high of $ 1,686.24 per troy ounce and is heading for the largest daily profit in seven months. For domestic investors, the precious metal is more expensive than ever at 1,548.36 euros.

Investors in the bond market took federal bonds and pushed the yield on ten-year securities down to 0.496 percent, the lowest level in more than four months. This rush on federal bonds depresses the returns on all securities below zero percent. At minus 0.042, the 30-year stocks are profitable as low as they were four months ago. The same applies to the trend-setting ten-year papers, whose yield drops to minus 0.498 percent.

By contrast, Italy’s ten-year bond yield jumped more than eight basis points to 0.997 percent, the highest level in more than two weeks. The gap to yields on German government bonds was around 145 basis points, the largest since the end of January.

The cost of default insurance for Italian bonds is also rising steeply. 112 basis points are now due for five-year papers – 13 basis points more than on Friday, according to IHS Markit. That is more than it has been since the end of January.

The euro is also under pressure: the European currency is losing 0.3 percent against the dollar to $ 1.081, the lowest level since mid-2017. Since the euro is not yet a “safe haven”, it is also suffering today from the spread of the corona Hysteria and the risk of significant economic consequences on Europe, specifically Italy, writes currency analyst Ulrich Leuchtmann in his morning comment.

In general, the currency market is turbulent: the euro fell to 1.061 against the Swiss franc, the lowest level since 2015. And the decline of the Turkish lira continues. Against the dollar, the rate fell another 0.9 percent to 6.15 lira.

With the economic data on Monday, stock marketers turn their attention to the Ifo index. Despite the coronavirus epidemic, the mood in the executive floors of the German economy brightened slightly in February. The barometer rose surprisingly to 96.1 points from 96.0 points, as the Munich Institute announced on Monday in its survey of around 9,000 managers. Economists surveyed by Reuters, however, had expected a drop to 95.3 points.

On the German market in particular, shares sensitive to the economy came under pressure. Bank prices in particular slipped. The share certificates German bank lost more than five percent and at the end of the MDax, the shares of the Deutsche Pfandbriefbank collapsed by almost nine percent. There were also disproportionate losses for car values.

Look at the individual values

Lufthansa: The international aviation association Iata estimates the industry’s loss of earnings due to the corona virus at nearly $ 30 billion, or three percent of total revenue. But things could get worse as the 2003 Sars scenario is expected. In Asia, South Korean and Asiana stocks lost more than five percent each, while the Australian Quantas lost over seven percent. Also the Lufthansa slips by more than seven percent.

Unicredit: According to an insider, Jean Piere Mustier, head of the Italian financial institution, remains with the major Italian bank. Unicredit would like to announce shortly that Mustier of the HVB mother will be preserved. The bank declined to comment. According to insiders, Mustier was considered a candidate for the top post at the British money house HSBC, for whom the current head of transition Noel Quinn has ordered a tough austerity course. However, the share cannot benefit from the news in the weak stock market environment and falls by 3.8 percent.

Thyssen-Krupp: In the multi-billion dollar bidding race for the elevator division, the employee representatives obtained commitments from the competing finance consortia to secure employment. “With these fair and best-owner agreements, we were able to take an elementary step into a secure elevator future,” said North Rhine-Westphalian IG Metall boss Knut Giesler. The share loses 3.2 percent.

What the chart technique says

After Monday’s price slide, investors may have to think about 13,000-point rates, possibly as high as 12,795 points. Since the beginning of November last year, the leading German index has found several stops at around 13,000 points. According to chart technology, this area is an important support. Only in December did the Frankfurt benchmark drop briefly to 12,795 points.

Before investors can think about rising prices again, the German stock market barometer must first close today’s downward price gap. Such downward price gaps arise when the daily low of the previous day is higher than the daily high of the subsequent trading day. Specifically: last Friday the lowest price was 13,500 points, the highest price today was from 13,236 points.

If the Dax could establish itself sustainably above 13,500 points, that would be the first important technical improvement.

“The markets have been too carefree with the corona virus”

Handelsblatt analysts Check: Baader Bank increases target price for the puma share

Baader Bank raised the price target for Puma SE from 82 to 90 euros according to figures and a conference call, but left the rating on “Add”. The sporting goods company remains on course for growth and has set a confident tone in the conference, wrote analyst Volker Bosse in a study available on Friday. He justified the higher price target with generally higher valuations in the market environment.

A total of 28 studies in the Handelsblatt analyst check deal with the Fresenius-Medical care shares. The “Hold” advice is countered by 17 buy recommendations. Two analyzes recommend selling the paper.

The weighted price target for all analyzes is 81.00 euros, which is above the current price of around 78.20 euros. With a weighted price target, recent studies have a higher impact.

Click here for the Handelsblatt analyst check

Here is the page with the Dax courses, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,

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