voestalpine AG vs. the ATX and international indices
Changes compared to March 31, 2019, in %
Development of the voestalpine share
Very high volatility characterized the voestalpine share throughout the business year 2019/20. The fallout from the increasingly fierce trade wars dominated business prospects and thus the share’s performance. While voestalpine felt the protectionist measures in China first, subsequently the economic downturn intensified in Europe too. The European steel industry, in particular, was confronted with a difficult environment. While demand in customer segments such as Railway Systems and the aerospace industry was stable, the business climate in the automotive and mechanical engineering industry darkened substantially over time. The price of the voestalpine share in the first half of the business year 2019/20 reflected the changed global environment early on. The fact that the share price developed along a fairly stable trajectory in the business year’s third quarter even though the company reported large, negative non-recurring effects in mid-December 2019 must be considered against this backdrop. In addition to impairment losses, provisions for restructuring expenses and other risks also had a negative impact on earnings during this quarter.
For the capital markets, the fourth quarter of the business year 2019/20 was dominated entirely by the COVID-19 pandemic. While the lockdown in China had a merely passing and relatively moderate impact on global stock markets, the global spread of the virus led to massive sell-offs of securities. The fear that the global economy could fall off the cliff put an end to the more than decade-long bull market. The speed of the ensuing crash was without precedent in modern times. In this environment, the voestalpine share lost about 40% of its value within a mere two weeks. Unemployment quickly skyrocketed in the leading industrialized countries as the global economy came to a sudden standstill. The process of consolidation in the capital markets continued regardless, albeit at a low level. For the time being, support measures that various governments announced to public acclaim in keeping with the watchword, “whatever it costs,” have put a stop to investors’ panic selling. Toward the end of the reporting period, the voestalpine share also managed to regain some of the ground it had lost. Overall, however, its price had fallen by about one third since the start of the business year 2019/20. It declined from EUR 28.04, the price at which it was traded on April 1, 2019, to EUR 18.54 as of March 31, 2020. While the ATX experienced similar losses in percentage terms during this period, the two benchmark indices, STOXX Index Europe and Dow Jones Industrial, managed to narrow their losses to about 16%.