Download - Salzgitter AG

Sources: XETRA
closing prices, DBAG,
Datastream STEELEU
4. The Salzgitter Share
The Capital Market and Price Performance of the Salzgitter Share
After having trended sideways for a longer period of time, the uptrend in the share markets, seen
since 2003, came to an end during the financial year 2007, with considerable corrections setting in.
Apart from regional upheavals in the financial sector, the ensuing skepticism concerning the continued
development of global economic growth was the main cause of the deterioration in stock
market sentiment.
At the end of February, a temporary crisis on China’s overheated stock markets was initially the
first cause of uncertainty in the international capital markets. From June onwards, sentiment darkened
again in the wake of the subprime mortgage crisis in the USA. Rising interest rates caused a massive
increase in the delinquency rate of mortgage borrowers with low credit standing. This was compounded
by a subsequent fall in real estate prices which plunged a number of US mortgage lenders
and, as the situation developed, a few international banks as well into financial difficulty. The resulting
deterioration in the financing conditions affecting companies and private individuals emanated from
the pessimistic expectations of the medium-term trend of the US economy, which partially culminated
in global recession scenarios.
The world’s stock markets reacted to the sentiment reversal with hefty corrections. Many institutional
investors began to restructure their portfolios, selling shares of cyclical sectors and focusing their
interest on the highly liquid equities of the major stock exchange indices to contain risks. The annual
performance of the DAX (+22%) and the MDAX (+5%) reflected these events.
Salzgitter AG Share Price Performance vs the European Steel Index, MDAX and DAX in 2007
Share price performance in %
160
140
120
100
80
Salzgitter AG
European Steel Index
DAX
MDAX
31/12/2006 31/03/2007 30/06/2007 30/09/2007 31/12/2007
The events on the international stock exchanges also had a considerable impact on our share price
and, temporarily, caused the persistently buoyant situation on the steel market to recede entirely. As the
uptrend of previous years initially held steady in the first half of the year, uninterrupted by the market