DAX Benchmark Retreats in Frankfurt; Infineon, Deutsche Bank Shares Fall
Sept. 7 (Bloomberg) -- Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd., talks about his investment strategy and the outlook for improving corporate dividends. Lenhoff speaks from London on Bloomberg Television's "On the Move" with Francine Lacqua. Brewin Dolphin oversees $33 billion. (Source: Bloomberg)
German stocks fell for the first time in three days, paced by a retreat in Infineon Technologies AG, Europe’s second-largest chipmaker, and the nation’s banks.
Infineon dropped to three-month low on concern the chipmaker is not planning to return cash to shareholders. Commerzbank AG and Deutsche Bank AG slipped amid reports European bank stress tests understated sovereign debt holdings. Software AG, Germany’s second-largest maker of software, fell 3.2 percent.
The benchmark DAX Index lost 0.6 percent to 6,117.89 at the 5:30 p.m. close in Frankfurt. The gauge pared some of last week’s 3.1 percent advance as German factory orders unexpectedly fell in July. Trading yesterday was about half the six-month average as U.S. markets were closed for the Labor Day holiday. The broader HDAX Index also fell 0.6 percent today.
Infineon, which last week agreed to sell its wireless unit to Intel Corp. for about $1.4 billion, dropped 3.6 percent to 4.33 euros, falling for a third day.
“In the last week investors speculated they would receive cash from the sale of Infineon’s wireless unit and now nobody knows what the company will do with the money,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Management hasn’t given much information about the future.”
Frankfurter Allgemeine Zeitung today reported that the company does not intend to pay out a special dividend or conduct a share buyback. The newspaper cited an interview with Infineon’s Chief Executive Officer Peter Bauer.
Bauer told the newspaper that the company may use the proceeds from the Intel deal to invest into existing operations and finance potential future acquisitions.
Commerzbank, Deutsche Bank
Commerzbank lost 2.1 percent to 6.34 euros, while Deutsche Bank fell 1.7 percent to 49.33 euros. Banks in Europe retreated after the Wall Street Journal reported stress tests published in July understated some financial institutions’ sovereign debt holdings. The newspaper cited its own analysis.
The Association of German Banks yesterday said the nation’s 10 largest lenders may need about 105 billion euros ($134 billion) in fresh capital.
Software dropped 3.2 percent to 81.81 euros. Financial Times Deutschland reported that the company is planning to buy a “larger” software company every two to four years. The newspaper cited an interview with Chief Executive Officer Karl- Heinz Streibich.
The company wants the next acquisition to be larger than its purchase of IDS Scheer AG last year, the newspaper said.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
Rate These Stories
Rate this Page