Mercedes 2008 Annual Report Download - page 40

36
26.70
4,810
2,451
8,776
8,860
200
26
66.50
8,067
4,400
13,265
15,308
361
94
-60
-40
-44
-34
-42
-45
-72
World economic slump affects development of global stock
markets. Due to the spread of the US subprime crisis to the
international financial markets and the resulting worldwide eco-
nomic slump, share prices fell drastically on all major stock
markets in 2008. This development already started in spring, when
increasing numbers of investors became convinced that the
financial crisis would have significant effects on economic devel-
opments in the triad markets (Western Europe, North America
and Japan) and in the emerging markets. However, only slight
effects on the real economy were expected at that point in time.
But as the year progressed, many investors became afraid that
economic growth would fall much more sharply than had been
assumed and that this phase of weak growth might last much
longer than in previous downturns. And in last autumn, the
dominant question became how long and how deep the recession
would be. In this environment, the Dow Jones Euro STOXX 50,
the Dow Jones Industrial Average, the S&P 500 and the Nikkei all
fell significantly. Indices in the triad markets were also much
more volatile. The DAX performed relatively well in autumn; its
performance was substantially boosted by the special develop-
ment of VW’s share price.
Shares were sold of companies in all sectors, although selling
pressure was particularly high for shares in European manufac-
turers of automobiles and commercial vehicles in expectation of
a global recession; many portfolio managers decided to give
auto stocks a lower weighting in their portfolios or to sell them.
Another reason for investors’ aversion to auto stocks was uncer-
tainty concerning the effects of future CO2legislation on customer
demand and carmakers’ profitability.
Unsatisfactory development of Daimler’s share price. In this
negative environment, Daimler’s share price fell by 60% over
the year, a significantly weaker development than the industry
index, although the Dow Jones STOXX Auto Index was sub-
stantially influenced by the sharp rise in VW’s share price caused
by Porsche increasing its stake in VW.
After closing the year 2007 at €66.50, Daimler’s share price came
under significant pressure in January due to strong market tur-
bulence and fell below €50. The increased volatility was primarily
related to index transactions and had little basis in fundamentals.
Nonetheless, even in this early phase some investors expected
Daimler’s earnings trend to be significantly impacted by the
economic downturn during the rest of the year. The share price
stabilized again during the spring, but investors remained cau-
tious with regard to auto stocks.
Daimler Shares. Global financial crisis causes high stock-market
volatility. Daimler’s share price falls sharply in a difficult environment.
Dividend reduced to €0.60 per share. Comprehensive investor
relations activities.
% change
08/07
End of 2007
DE0007100000
710000
D1668R123
DAI
DAIGn.DE
DAI:GR
Stock-exchange data for Daimler shares Development of Daimler’s share price and relevant indices
End of 2008
ISIN
German securities identification number
CUSIP
Stock-exchange abbreviation
Reuters ticker symbol
Bloomberg ticker symbol
Daimler’s share price (in €)
DAX 30
Dow Jones Euro STOXX 50
Dow Jones Industrial Average
Nikkei
Dow Jones STOXX Auto Index
S&P Automobiles Industry Index