WACKER Stock in 2017
WACKER’s share price was influenced by a range of factors during 2017. The stock’s performance was supported not only by the deconsolidation of Siltronic AG, with WACKER giving up its majority ownership in March 2017 and remeasuring its remaining stake, but also by the good news that came from the solar and semiconductor industries during the year. The significant increase in the share price reflected the ongoing strength of WACKER’s chemical divisions, especially WACKER SILICONES.
Global stock markets performed solidly in the first quarter of 2017. Despite increased political uncertainty in Europe and the USA and ongoing geopolitical crises, the major stock market indices recorded noticeable gains from January through March. Financial markets in Germany were buoyed by the unchanged accommodative monetary policy of the European Central Bank. In the United States, stock prices were lifted by hopes of a multi-billion-dollar, federal infrastructure-spending program and tax cuts for businesses. To counter the risk of the US economy overheating, the US Federal Reserve Bank raised the federal funds rate by 0.25 percentage points in mid-March, from 0.75 percent to 1.0 percent.
Both the DAX and the MDAX rose more than 7 percent in the January-through-March quarter. WACKER stock started Q1 2017 at €98.85 and initially posted substantial gains, supported by positive analyst comments. After reaching a high of €114.30 on January 26, the share price came under pressure. The factors involved here included concerns among market participants about the impact of rising raw-material prices and lower solar-silicon market prices. The share price subsequently declined, reaching its low for the quarter of €96.55 on March 31. That was 2 percent lower than at the start of the year and corresponded to a market capitalization of €4.80 billion.
Global stock markets continued to perform well in the second quarter of 2017, but they were also relatively volatile. Political events, such as the French presidential election result, strengthened market participants’ optimism. Uncertainty, on the other hand, was prompted by the interest-rate rise of mid-June in the USA, by the US administration’s efforts to establish trade barriers, and by speculation about an imminent end to the eurozone’s accommodative monetary policy. As a result, the major stock indices gave back a large part of their earlier gains near the end of the second quarter.
While the MDAX added over 2 percent overall between April and June, the DAX closed only marginally above its level at the end of March. WACKER stock started Q2 2017 at €96.55. Amid occasional pullbacks, it initially posted substantial gains until mid-May. After reaching a high of €103.00 on May 16, it came under increasing pressure in the weeks that followed. Contributing factors here were continued concerns among market participants that rising raw-material prices for chemicals and declining polysilicon market prices could impair WACKER’s earnings prospects. The share price reached its low for the year of €91.34 on June 16. By the end of June, WACKER stock had recovered some of its losses to close the quarter at €95.05 on June 30, down about 2 percent from the beginning of the quarter. WACKER’s market capitalization was €4.72 billion.
The volatility in global equity markets continued into the third quarter of 2017. It was not until the end of the quarter that share prices gained some ground. Factors in this trend included ongoing geopolitical crises and continued political uncertainty in the USA and Europe. Additionally, market confidence was particularly impacted by the US Federal Reserve Bank’s increasingly restrictive monetary stance and by speculation about an approaching end to accommodative monetary policy in the eurozone. The Federal Reserve raised the federal funds rate again in mid-June and announced that it would begin to normalize its balance sheet as of October. The European Central Bank, on the other hand, did not change course, deciding to leave its main refinancing rate unchanged at zero in early September.
Germany’s benchmark indices trended sideways for most of the third quarter. By the end of August, the MDAX had not made any sustained gains. Over the same period, the DAX was at times noticeably below its opening level for the quarter. It was not until mid-September that a slight upward trend gained traction. During the full three-month period, the DAX rose just over 4 percent, while the MDAX gained over 6 percent. In Q3 2017, WACKER stock performed considerably better than the market as a whole. It started at €95.05 and reached its reporting-quarter low of €94.00 on July 10, before making substantial gains in the weeks that followed. After a slight pullback mid-August, the stock price began climbing again, buoyed by positive comments from analysts. It reached its reporting-quarter high of €123.65 on September 28 and finished trading the following day at €121.30. That was 28 percent higher than at the start of the quarter and corresponded to a market capitalization of €6.03 billion.
The DAX and the MDAX both rose by 1 percent in the fourth quarter. WACKER’s share price moved upward, outperforming the two German benchmark indices by a wide margin.
In early October, WACKER held its Capital Market Day in London. The company’s Executive Board used the occasion to affirm the corporate strategy and discuss current market developments. The stronger-than-average increase in the share price at year-end was driven by the rapid recovery in demand for high-quality polysilicon and by positive business trends at the chemical divisions, especially WACKER SILICONES, as well as by favorable earnings expectations for Siltronic. From early October to year-end, Wacker Chemie AG stock gained 34 percent, advancing from €121.30 to €162.20. Market capitalization at year-end was €8.06 billion.
Discussions with market participants during the year focused increasingly on the successes and market prospects of the chemical divisions.