In the second quarter of 2014, LANXESS stock did not continue the encouraging performance seen in the preceding quarter. Following a good start to the period, the price of our shares declined particularly after mid-May, dipping below the €50 mark at times in June. Our stock closed the quarter on June 30 at €49.30.
The world’s leading indices reached all-time highs in the second quarter. In June, the DAX surpassed 10,000 points for the first time in its history. The Dow Jones, the main U.S. stock index, also reached a record level of nearly 17,000 points. The European Central Bank’s decision to further ease monetary policy provided significant stimulus, especially for the German indices. The ECB introduced extensive monetary policy measures including a further reduction in the prime rate to 0.15%, the first-time introduction of negative deposit rates, and a new credit program. Improved employment data for the United States also buoyed investor confidence, with the Federal Reserve predicting a further recovery in the U.S. labor market. The Fed also indicated that interest rates are to remain low for some time even after the bond buyback program in the U.S. expires.
Despite these positive signals, however, markets came under pressure at times during the second quarter, especially from geopolitical developments. In April and May, the stock markets continued to be impacted by the ongoing crisis in Ukraine, while the heightening conflict in Iraq led to temporary declines thereafter. Against this background, the DAX was unable to maintain its record high, closing the second quarter on June 30 at 9,833 points, up 2.9% on the quarter. The benchmark index Dow Jones STOXX 600 ChemicalsSM closed the quarter at 776.36 points after almost reaching the 800-point threshold at the beginning of June. Overall, however, this index rose by 3.5% on the quarter. In addition to the Dow Jones STOXX 600 ChemicalsSM, we now also benchmark our stock price development against the MSCI World Chemical Index, which is more comprehensive and has a more international composition. This index closed the quarter up 3.7% at 254.09 points.
LANXESS stock opened the second quarter at €55. Matthias Zachert took over as Chairman of the Board of Management of LANXESS at the beginning of the quarter, the news of his appointment already having been very well received by the capital market. The price of our shares remained above €50 until mid-June before declining at the end of June in the wake of the general market uncertainty. LANXESS stock closed the quarter down 9.9% at €49.30.
Another event of central importance in the reporting period was the 10% increase in the capital stock of LANXESS AG resolved by the Board of Management on May 7 with the approval of the Supervisory Board. The additional 8,320,266 no-par bearer shares were successfully placed with international institutional investors at a price of €52.00 per share, resulting in gross proceeds of €433 million. The capital stock thus increased to €91,522,936, divided into the same number of no-par bearer shares. The capital increase was made to finance upcoming restructuring measures and strengthen the Group’s financial position. At the beginning of May, in the course of its reporting on the first quarter of 2014, LANXESS had already announced the development of a realignment program to restore the Group to significantly greater competitiveness and profitability.
A summary of the developments at LANXESS during the second quarter of 2014 is provided in the Highlights section.
|Q4 2013||Q1 2014||Q2 2014|
|Capital stock/no. of shares 1)||€/no. of shares||83,202,670||83,202,670||91,522,936|
|Market capitalization 1)||€ billion||4.03||4.56||4.51|
|High/low for the period||€||53.64/43.76||55.13/44.64||56.75/48.07|
|Closing price 1)||€||48.48||54.75||49.30|
|Trading volume||million shares||45.817||70.901||38.903|
|Earnings per share||€||(2.45)||0.30||0.63|
|1) End of quarter: Q4: December 31, 2013, Q1: March 31, 2014, Q2: June 30, 2014.|