German Stocks Advance as Bayer Rallies on Earnings Report

German stocks rose, following their decline last week, as Bayer AG (BAYN) lead gains on the benchmark DAX Index after reporting earnings that beat estimates.

Bayer advanced 3.3 percent as quarterly profit climbed and as people with knowledge of the matter said the drugmaker will explore the sale of its $10 billion material-science division. Medigene AG (MDG1) added 4.6 percent after getting a patent in the U.S. Siemens AG (SIE) lost 2.5 percent as Europe’s biggest engineering company was said to propose an asset swap with Alstom SA.

The DAX climbed 0.5 percent to 9,446.36 at the close of trading in Frankfurt, following a loss of 0.1 percent last week. The equity benchmark is 3 percent away from the record it set on Jan. 17. The number of shares changing hands in DAX-listed stocks today was 19 percent lower than the average of the past 30 days, data compiled by Bloomberg showed. The broader HDAX Index added 0.4 percent today.

“A nice result from Bayer shows that it’s a stable long-term core investment, and it’s also quite surprising that they’d want to re-engage in M&A after such a long time,” said Michael Woischneck, who helps oversee about 1 billion euros ($1.4 billion) at Lampe Asset Management in Dusseldorf. He owns shares in Bayer. “Acquisition activity across all industries can be the driver of markets this year. This will unlock more value, more productivity, and may make a year-end target of even 11,000 for the DAX too prudent.”

A U.S. report showed contracts to buy previously owned houses increased 3.4 percent in March, more than economists had predicted. They had dropped for eight consecutive months. The National Association of Realtors’ index of pending property sales decreased a revised 0.5 percent in February.

Bayer Rallies

Bayer added 3.3 percent to 98.95 euros. First-quarter earnings before interest, taxes, depreciation, amortization and special items rose to 2.74 billion euros, beating the 2.56 billion-euro average estimate compiled by Bloomberg. Bayer will explore its options for Bayer Material Science, so it can focus on health, people with knowledge of the matter said.

Medigene climbed 4.6 percent to 4.94 euros, rebounding from a three-day slump. Its subsidiary, Trianta Immunotherapies GmbH, received a patent for a cancer treatment. The therapy arms white blood cells with receptors that enable them to detect and kill tumor cells, according to a statement.

Mologen AG (MGN) rose 1.4 percent to 11.27 euros after saying its cancer drug passed an early stage trial in the U.S. Testing on healthy patients found no significant side effects from the use of the MGN1703 treatment, the biotechnology company said.

Siemens Slides

Siemens lost 2.5 percent to 93.59 euros. The company offered to give Alstom some of its transport assets and a cash payment in exchange for the French company’s energy business, according to people familiar with the matter. Siemens will match or beat the financial terms of General Electric Co.’s offer, which values Alstom at about $13 billion, they said. Siemens said it will decide whether to bid for Alstom after meeting French President Francois Hollande.

Sartorius AG (SRT), which makes instruments and filters used in laboratories, declined 5.9 percent to 95.70 euros after a five-day rally pushed the stock to its highest price since at least 1999. First-quarter sales rose 6.3 percent at constant exchange rates, less than its full-year target for growth of as much as 10 percent.

Air Berlin Plc (AB1) dropped 5.9 percent to 1.65 euros. The airline reported an annual operating loss of 231.9 million euros and said sales fell to 4.15 billion euros in 2013. Etihad Airways PJSC, Air Berlin’s largest shareholder, will buy 300 million euros of convertible bonds issued by the carrier to increase its capital.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Will Hadfield, Srinivasan Sivabalan

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