Shares and Bonds

Volkswagen AG’s ordinary and preferred shares again posted gains in fiscal 2013, with preferred shares surpassing the €200.00 barrier for the first time and reaching new highs. The US budget debate and the unresolved European debt crisis generated considerable volatility in some markets. Volkswagen further strengthened its liquidity and capital base through the issue of a mandatory convertible note and hybrid notes.


At the beginning of 2013, the DAX continued the positive performance it had seen in the final quarter of 2012. The increase in share prices was primarily due to the upbeat mood following the provisional budget compromise in the USA. The DAX then moved sideways amid volatility until the end of February. In an environment dominated by the European debt crisis, share prices were supported by largely healthy corporate results. The DAX reached a new high in mid-March. The reasons for this were the central banks’ expansionary monetary policy as well as hopes of an increase in global growth. Towards the end of the first quarter, the situation in Cyprus generated renewed uncertainty regarding the stability of the eurozone, initially interrupting the DAX’s favorable trend.

It was because of this uncertainty that the DAX’s negative trend continued in the opening weeks of the second quarter. At the end of April, worsening economic data then fueled hopes on the financial markets of further interest rate cuts. The ensuing price rise strengthened at the beginning of May, after the European Central Bank had cut its key interest rate to a record low of 0.5% and the USA reported positive economic data. Profit taking, weaker economic data from China and speculation about the end of the expansionary US monetary policy led to falling share prices in the rest of the second quarter. Share prices retreated further in the wake of the US Federal Reserve’s announcement of a plan to scale back bond-buying. The markets only showed encouraging trends again at the end of June.

The DAX continued this upward movement until the beginning of August. This was attributable to the positive signals from the American labor market and the central banks’ ongoing expansionary monetary policy, in addition to unexpectedly good economic and corporate data. After moving sideways in the course of August, prices retreated significantly at the end of the month, particularly as a result of the strained political situation in Syria. As early as September, the markets rallied, in part reaching new highs, on the back of expectations that the loose monetary policy would continue. A slight downward trend was seen again up until the end of the third quarter on account of the US budget dispute and other factors.

After a muted start to the final quarter, the DAX continued its upward trend amid low volatility. In addition to the – albeit only temporary – agreement reached in the dispute about raising the debt ceiling in the USA, positive economic data and the interim agreement on the Iranian nuclear program created a buoyant mood in the financial markets. This was also boosted by the European Central Bank again cutting the key interest rate, to 0.25%. Investors’ renewed concerns that the expansionary US monetary policy would be curbed led to a correction on the equity markets in the first half of December. However, the brief downward movement was reversed again in mid-December by strong price gains. Although the US Federal Reserve announced it would reduce its bond purchases in stages, it combined this with a commitment to a long-term low interest rate policy. Unexpectedly good economic data in the USA and Europe then pushed Germany’s leading index to an all-time high in the last few weeks of trading. At the end of 2013, the DAX had reached 9,552 points, a significant increase on the previous year’s figure (+25.5%). The EURO STOXX Automobile & Parts closed the year at 459.5 points, 36.0% higher than at the end of the previous year.