Dax starts the new quarter with a record

At the start of the second quarter of the stock exchange, the German stock market continues its record hunt. The shares of Delivery Hero and Henkel come into focus. And at the Telekom general meeting there is a dispute over the dividend.

Aggressive: The stock market bull retains the upper hand at the start of the second quarter.

DThe German leading index Dax achieved another record high on Maundy Thursday. The leading index temporarily exceeded the 15,100 point mark for the first time and was still 0.4 percent up to 15,070 points at noon. The M-Dax of the medium-sized stocks rose by 1.2 percent to 32,096 points. The Euro Stoxx 50 benchmark index was up 0.4 percent.

The leading index Dax has now been 9 percent up since the beginning of the year. The slump that the German stock market suffered in mid-March 2020 when investors suddenly realized that the coronavirus outbreak would develop into a global pandemic seems to have long been forgotten. At that time, the Dax fell to well below 9,000 points. The subsequent recovery was faster than many experts expected. In late summer, investors finally switched to attack after positive reports of successful tests of corona vaccines made the rounds.

Positive impulses came from Asia and the United States on Thursday: The mood in the managerial floors of Japanese large-scale industry surprisingly brightened significantly after the severe slump due to the corona pandemic. In addition, US President Joe Biden’s billion dollar infrastructure program was well received by investors. Biden’s plan includes the modernization of roads, bridges, several airports and investments in local public transport and electric mobility.

Food suppliers with differences

At the top of the Dax, the shares of Delivery Hero rose by around five percent. The South African media group Naspers had increased its stake in the food supplier. The shares of industry colleague Deliveroo, which plummeted after the IPO in Great Britain, fared very differently. Deliveroo is also a food delivery service, but unlike Delivery Hero, it is not active in Germany. Among the other favorites in the leading index, the shares in BMW gained a good one percent and thus benefited from a buy recommendation from Deutsche Bank.

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To the detailed view

The preferred shares of Henkel slipped into the red after a positive start and recently fell by almost one percent below the weakest DAX values. In the first three months of this year, according to the consumer goods group, sales on their own and adjusted for exchange rate effects are likely to grow more strongly than analysts expected.

As the largest division of Henkel, the adhesives business got off to a strong start to the year, wrote analyst Guillaume Delmas from the major Swiss bank UBS. From the second half of the year onwards, however, the earnings trend can no longer be predicted quite as well.

Henkel expects a good quarter

The consumer goods manufacturer had previously delivered a positive outlook. Accordingly, Henkel is anticipating a strong first quarter in terms of sales. “Despite the ongoing Covid 19 pandemic, we expect Henkel to report very good development in the first quarter of the current fiscal year,” said the head of the Dax Group, Carsten Knobel, according to the announcement.

Accordingly, the group revenues in the first three months are expected to have increased organically, i.e. adjusted for portfolio and exchange rate effects, by around 7 percent. This would mean that the first quarter of the year would be well above what Henkel has been expecting for the full year so far. For 2021, the Management Board has so far given the prospect of sales growth of 2 to 5 percent.

According to Henkel boss Knobel, the good development in the first quarter was carried by the adhesives business: The largest group division is expected to grow organically by 12.5 percent. In 2020, the area was slowed down by a significant drop in demand and therefore lagged behind the previous year. In the second half of the year, however, there were signs of a recovery.

In contrast, the cosmetics business with brands such as Schwarzkopf and Fa is expected to grow by only 1 percent in the first quarter due to the corona. The lockdown measures and the sometimes long closure of hairdressing shops are likely to have had an impact here.

For the division with detergents and cleaning agents such as Persil and Bref, Henkel predicts an increase of 3.5 percent. In this area, the manufacturer benefited from the increased demand for hygiene products in the Corona year 2020.

Another DAX group had positive news to report: Deutsche Telekom has confirmed its growth targets for the current year. The adjusted operating result without leasing expenses (Ebitda AL) is expected to rise to around 37 billion euros, the Bonn-based Dax group said on Thursday at the annual general meeting, which is taking place virtually for the second time due to the corona pandemic. In 2020, the result jumped 41.6 percent to 35 billion euros thanks to the workhorse T-Mobile US.

The free cash flow, i.e. the inflow of liquid funds, is expected to swell to eight billion euros in 2021 after 6.3 billion euros in the previous year. After sales cracked the 100 billion euro mark for the first time in 2020, revenues should also increase in the current year. As already announced in November, shareholders will have to be content with a dividend of 60 cents per share.

This caused criticism from shareholder representatives in advance. Frederik Beckendorff from the German Protection Association for Securities Possession described the amount as “in need of explanation”. A large part of the distribution goes to the federal government, which is still the largest single shareholder and holds almost 32 percent of Telekom.