voestalpine AG vs. the ATX and international indices
Changes compared to March 31, 2020, in %
Development of the voestalpine Share
In the fourth quarter of the business year 2019/20, the global capital markets—and thus the voestalpine share—were pulled into a downward spiral owing to the accelerating spread of the COVID-19 pandemic. The stock markets started to rebound toward the end of the aforementioned business quarter thanks to various governments’ announcements that they would support their economies through comprehensive emergency packages. The fluctuations in the price of the voestalpine share largely stopped in the first few months of the business year 2020/21. Its lateral price movement remained in place until roughly the end of the first half of the reporting period. The business year’s second half presented a completely different picture, however. Early October 2020 saw an upward movement in the share’s price that did not change until the end of the reporting period. For one, demand especially from the automotive industry jumped substantially after the Northern summer, in turn leading to improved forecasts for the company’s earnings performance in the business year 2020/21. For another, the pharmaceutical industry achieved breakthroughs in November 2020 regarding the development of effective vaccines against COVID-19. The prospect of a return to “normal” economic activity worldwide led to euphoria among investors, in turn causing sharp upswings in the stock particularly of companies sensitive to economic developments. Geopolitical issues that generally determine developments in the international capital markets receded into the background. For example, the fact that the previous president—whose measures to stimulate the economy through tax cuts and infrastructure programs boosted the U.S. stock indices—lost the election did not trigger longer-lasting price declines. The same goes for the resignation of the Italian government, which had failed due to different views on the allocation of the European Commission’s Recovery Fund: this, too, had but a moderate effect on the capital markets. on the whole, optimistic investors that anticipated prosperous economic developments were the ones that dominated this market phase. They pointed not only to the stimulus packages that had been enacted by governments and central banks alike but also to high savings rates in various countries. These effects outweighed fears that the threat of impending bankruptcies as well as the loss of income due to short time work and high unemployment rates could put a damper on economic development.
The voestalpine share benefited from the positive sentiment in the stock markets, too. In addition, analysts kept raising their earnings forecasts for the voestalpine Group. Against this backdrop, the voestalpine share rose by 90.6% within one business year, from EUR 18.54 as of April 1, 2020, to EUR 35.33 as of March 31, 2021. The increase in the share’s price thus significantly outperformed the two benchmark indices, ATX and Stoxx (Europe), which rose by a mere 62.4% and 38.2%, respectively, during the same period. voestalpine’s share also delivered much better performance relative to the Dow Jones Industrial during the reporting period.
