With the global economy in a robust state, the equity markets performed well in the 2006/07 fiscal year. The continued success in export trade being experienced by domestic companies was instrumental in driving up the German equity indices. Growth was also boosted by substantially improved indicators for the domestic economy. But following the solid performance up to the end of the first half of 2007, the crisis in the US real estate market, and fears of its impact on the financial sector and the global economy, led to price corrections and increasing volatility around the world from July onwards.
The DOUGLAS share
The German equity index, DAX, stood at 6,004 points at the beginning of DOUGLAS HOLDING's fiscal year on October 1, 2006. It rose over the following twelve months by 31 percent and closed at 7,861 points on September 28, 2007. The MDAX, which also includes the DOUGLAS shares, did not perform quite as well. Over the same period, the index rose by 21 percent and closed at 10,334 points. The performance of German retail stocks is being tracked in the Prime Retail sector index. The significant rise of the index of nearly 25 percent in the reporting period reflects the improvement to domestic fundamentals and the related optimistic assessment of future consumer demand in Germany by the capital markets. The VAT increase in January and the sharp rise in energy prices, however, weakened the dynamics of the performance and lowered investors' expectations of share prices in the course of the year.
Fig. 8 | DOUGLAS share – key information
|Type of share/denomination||No-par value shares|
|Admission segment||Prime Standard|
|Stock exchanges||Frankfurt am Main, Düsseldorf, Berlin-Bremen, Hamburg, Stuttgart, Hanover and Munich|
|Ticker||symbol DOU GR (Bloomberg) DOHG.DE (Reuters)|
|Designated Sponsor||Sal. Oppenheim jr. & Cie. KGaA|
In this environment, the DOUGLAS shares performed relatively well. To the favorable opinions given by analysts, the accelerated value-oriented organic growth, targeted acquisitions especially in the Books and Perfumeries divisions, and a focus on investment portfolios – the market responded positively and the share price rose. On May 22, 2007, the DOUGLAS share reached its all-time high of 50.20 EUR. It closed on XETRA at 43.81 EUR on September 28, 2007, representing a rise over the fiscal year of around 19 percent. Taking into account the 2005/06 dividend of 1.10 EUR per share, this means an added value of around 22 percent.