D.he German stock exchange index Dax reached a record high of 14,781 points on Thursday. The announcement by the US Federal Reserve the previous day that it would stick to its expansionary monetary policy may also have played a role in this.
Dax investors are currently focusing primarily on car manufacturers: Volkswagen has ousted the software manufacturer SAP SE from the throne and has become Germany’s most valuable listed company. According to the Bloomberg news agency, the increase was driven by investors’ growing belief in the strategy for electric cars with which VW is attacking pioneer and market leader Tesla.
The rise in VW ordinary shares, which was already strong on Wednesday, continued on Thursday. At its peak, the shares of the Wolfsburg-based company with voting rights gained over 14 percent to 353 euros and thus reached a further high since 2008. Meanwhile, the non-voting preference shares also climbed to the highest level since 2015 by a further 9 percent to 252.20 euros.
With a market value of around 146 billion euros, Volkswagen has now overtaken the software provider SAP as the most valuable listed German company. The Walldorf company has a market capitalization of around 127 billion euros.
VW’s preferred shares had already risen by up to 11 percent the day before in Frankfurt, bringing the market capitalization to 139 billion euros – around 13 billion euros more than the software company SAP. This marks a spectacular comeback for the German industrial icon. According to Bloomberg, VW was last at the top of the Dax six years ago, shortly before the diesel scandal broke out.
Stockbrokers puzzled over the reasons for the strength of Volkswagen shares. In addition to the ambitious electric strategy, American private investors could once again play a role, arranging to make targeted purchases of selected stocks on the Internet. Price bets from institutional investors could also have spurred the Volkswagen papers on.
Tesla remains far more valuable
However, VW does not come close to Tesla with a market capitalization of around 640 billion dollars (538 billion euros). Nevertheless, the latest increase shows that investors are now placing more trust in VW boss Herbert Diess’s aggressive push for electric cars.
The major American bank JP Morgan has now raised the price target for the preferred shares of Volkswagen from EUR 215 to EUR 266 and left the rating at “Buy”. In his last study, he had already pointed out that investors were too pessimistic with regard to the automaker in the past year, wrote analyst Jose Asumendi in a study published on Thursday. Because of the electric models, a more stable management structure and the cash flow target for 2021, the valuation will continue to rise.
There is optimism for the entire automotive industry: The Stoxx 600 Europe Autos is heading towards its highs from 2018 and just above 2015 with a monthly plus of almost 17 percent.
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