2023 was a good year for stocks. The DAX has gained almost 20 percent in value since the beginning of the year and has reached new record levels. Which stocks in the DAX did well and which did poorly?
If you look at the entire stock market year 2023, the defense company Rheinmetall is among the front runners. Anyone who bought Rheinmetall shares at the beginning of the year can look forward to an increase in profits of more than 46 percent. That’s how much the tank manufacturer’s shares have gained since then.
Not surprising for DZ-Bank’s chief equity strategist, Sven Streibel. “Armaments spending is a priority for many countries. A lot of money flows into the industry. That boosts prices.”
The defense company was in a neck-and-neck race in the last few meters with a real surprise candidate: Heidelberg Materials. Annually, papers from Heidelberg Materials, a world-leading manufacturer of building materials such as cement and concrete, have also gained more than 46 percent. And this despite the fact that the construction industry is pretty much idle due to increased interest rates and costs.
This example shows once again that the stock market can see through current crises, says Sven Streibel from DZ-Bank. “This is a typical stock that is very sensitive to the economic situation. And Heidelberg Materials sells all over the world. When economic concerns are high in the world, this stock suffers. But when the worries subside again, then such a stock can also benefit again. ” In addition, many investors believed the stock was undervalued.
Covestro is also a special case with regard to the price gains this year. While the chemical industry as a whole is suffering from increased energy costs and weak demand, the papers of the specialty plastics manufacturer from Leverkusen were able to increase in value by almost 40 percent. Takeover speculation by the Arab oil company Adnoc has driven up prices.
Betting on the future drives prices
It is bets on the future that drive share prices – this also applies to the sporting goods manufacturer Adidas. The shares have gained around 44 percent since the beginning of the year. This clearly has to do with the change in boss in Herzogenaurach, says investor and stock market podcaster Christian W. Röhl. “This is the comeback story of Björn Gulden, who received a lot of praise from the stock market, but who now has to deliver.”
On January 1, 2023, the previous Puma CEO took over the position of CEO at Adidas. At the end of 2022, the sports manufacturer’s shares were at a low point due to sales difficulties on the Chinese market and because of the stopped collaboration with a scandal rapper who had generated a lot of sales for the group. Adidas shares have been on a recovery path since the beginning of the year.
Flop at Bayer, State guarantees for Siemens Energy
There was also a change in boss at the pharmaceutical and agricultural group Bayer. In June, the American Bill Anderson inherited the long-time Bayer boss Baumann – but with the position there was also a lot of construction work. Bayer shares are one of the losers of the year. With a loss of more than 30 percent, the shares of the Leverkusen pharmaceutical company are among the last placed in the Dax.
In addition to the never-ending glyphosate legal dispute in the USA, the flop of a drug that was considered a beacon of hope caused Bayer’s share price to plummet at the end of November. “The pipeline in the pharmaceutical sector is thin,” says stock market observer Röhl. Other pharmaceutical companies such as Pfizer also have more reserves. “That is not the case with Bayer because they are already up to their eyeballs in debt with the takeover of Monsanto.”
Bayer shares the red lantern this year with the energy technology group Siemens Energy; the shares have lost almost a third of their value since the beginning of the year. Renewable energies should be the frontrunners on the stock exchange simply because of the politically desired energy transition.
Investor Röhl describes this as the “irony of history”. “The story is that Siemens Energy has overreached itself terribly by taking over the minority shares in the Spanish subsidiary Siemens Gamesa.” The wind power business is currently not going well for Siemens Energy due to quality deficiencies. The group had to set aside billions of dollars for damages and repair work, which ultimately led to a federal guarantee for the group.
Corona profiteers are among the last in the Dax
If you look at the last places in the DAX, you will notice that the companies that were among the winners during the corona pandemic are far behind. Online retailer Zalando is one of them, but also pharmaceutical companies such as Merck and laboratory equipment suppliers such as Qiagen and Sartorius. A typical countermovement, says capital market expert Christian Kahler from the fund company Kahler and Kurz Capital. “At Sartorius or Qiagen it was actually the case that market participants were too optimistic. They continued to some extent the good development during Corona. But in fact it was the case that some of the companies had to issue profit warnings.”
From the point of view of chief investment strategist Streibel from DZ-Bank, pharmaceutical stocks, as defensive sectors, have a difficult time in times of rising interest rates, as high spending on research always plays a role here. On the other hand, the increased interest rates have brought significant price gains to the shares of banks and insurance companies, as can be seen in the price development of Commerzbank, Allianz and Münchner Rück this year.
Interest rate cut fantasies and AI drive the prices
For fund manager Christian Kahler, there are two big themes that have driven share prices overall this year: the prospect of an interest rate cut by the Fed and artificial intelligence. The latter has once again boosted tech stocks in the USA. And also raised the only software company in the Dax to the top positions: SAP was the fourth best value in the Dax in 2024. Since this year, SAP has once again been among the 100 most valuable companies in the world according to the Handelsblatt ranking.
The industrial group Siemens also had an upswing this year thanks to good business figures and entered the top 100 ranking at number 89. Over the year, Siemens shares have gained more than 30 percent.
Stock market contrasts with economy
“2023 was an extremely good year for the stock market and therefore stands in stark contrast to the economy,” says fund manager Kahler. From his point of view, this is the lesson that investors should learn: that the economy does not necessarily have anything to do with the stock market.
Streibel adds that relevant end markets for DAX companies are the USA and China. More important than economic development here is how the economy is running in these countries. “These are the main sales markets for DAX companies. Around 30 percent of DAX sales are generated in the USA, around 15 percent in China.”