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German Stocks Advance as Banks Climb on Eased Basel Rule

German stocks rose, following the DAX Index (DAX)’s first weekly increase of the year, as the Basel Committee on Banking Supervision made concessions to lenders on a proposed ratio.

Deutsche Bank AG (DBK) and Commerzbank AG (CBK) each advanced more than 4.5 percent after the group of financial regulators modified its leverage ratio. Suedzucker AG (SZU) surged the most since October 2008 after the sugar producer posted third-quarter operating profit that exceeded analysts’ estimates.

The DAX Index climbed 0.4 percent to 9,510.17 at the close of trading in Frankfurt. The equity benchmark rose 0.4 percent last week as investors assessed a report that showed the U.S. unemployment rate unexpectedly fell in December while hiring slowed. The broader HDAX Index added 0.5 percent today.

“Bank shares provide the DAX with some support,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “The new Basel rule is a positive for banks and investors will see less risk connected with bank shares. There are no big triggers at the moment. Investors are now waiting for companies to report earnings.”

The volume of shares changing hands in DAX-listed companies was 19 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.

Basel Rule

Deutsche Bank and Commerzbank increased 4.7 percent to 38.57 euros and 5.5 percent to 13.69 euros, respectively, as a gauge of European lenders made the biggest contribution to the Stoxx Europe 600 Index’s advance.

The Basel committee’s rule changes give lenders more scope to offset their transactions with each trading partner when calculating the ratio. They also ease proposals on how lenders determine the size of their off-balance-sheet activities.

The meeting of regulators in Basel, Switzerland decided to adjust the leverage ratio after thoroughly analyzing bank data, it said in a statement, yesterday.

Suedzucker jumped 11 percent to 21.59 euros. Operating profit in the third quarter dropped to 183 million euros ($250 million), beating the average analyst projection for sales of 138 million euros.

Dialog Semiconductor Plc (DLG) surged 7.4 percent to 15.98 euros after increasing its forecast for sales in the fourth quarter. The maker of chips used in Apple Inc.’s iPhone predicted quarterly revenue of $352 million, beating the average analyst estimate of $307 million. The company cited higher-than-expected demand at its Mobile Systems business.

Deutsche Boerse

Deutsche Boerse AG (DB1) slid 2.1 percent to 61.79 euros after the European Energy Exchange, the company’s trading venue for energy products, bought a 52 percent stake in Singapore’s Cleartrade Exchange. The operator of the Frankfurt Stock Exchange also announced that its market data services division has acquired Impendium Systems, a London-based firm that uses cloud-based software to help customers comply with regulations in Europe, North America and the Asia-Pacific region.

“Deutsche Boerse has announced numerous small acquisitions -- including two today -- without explaining to the market how these deals fit into their overall strategy,” said Peter Lenardos, an exchange analyst at RBC Capital Markets in London. “So there could be investor confusion over strategy pressuring the shares as well.”

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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