Home News "At least 30 percent for the DAX still in there"

"At least 30 percent for the DAX still in there"


The U.S. central bank flooded the markets with fresh dollars. What does this mean for the stock markets?

On the subject of central bank liquidity and I’m not too much thought. This is rather the cause of economists. What interested me rather, the corporate balance sheets. And they look very good. If happen in the coming weeks, no more disasters, the year 2010 as the best in the long history of BASF will be remembered, to name one example. Or BMW: Extrapolating the profit on the year, and the automaker will close with a record. Linde also incidentally. There are numerous examples.

And what the investor concludes?

Many companies, despite the recovery in the last fifteen years, still attractively valued on the exchange.

Its focus is on the European stock markets. Which regions, which industries do you prefer at the moment?

Such a distinction I do not. It is important that a company has strong market entry barriers against competitors. For only then can permanently protect its high margins. A barrier is simply the market leader, but leadership has not necessarily have anything to do with the brand. Let’s take the example of BASF. The customers do not buy the chemical company, BASF because the mark is so exciting. You buy the plastics, BASF is because of its size in this area of cost leader and can offer such prices. The company has based its market position not even the full cost advantage to pass on to its customers. This is the basic requirement that the shareholders something left over.

Call BASF for example. What concerns you have on the docket?

L `Oreal and Nestle, for example, to still give two international examples.

What about the utilities? Most are huge can, by pushing their prices. Classic defensive stocks.

For the suppliers, I would be careful. One must not forget that the state-regulated companies. And the state influence has its price, which we see from the debate about the fuel tax. This seems to me the current rates but given adequate attention.

Their focus is on Europe. Nevertheless, a question to the whole world: Many of your colleagues say, the biggest profits are making in Asia, especially China.

I think the market there for overvalued, especially the shares of industrial companies. Lastly, there are two ways to reduce the overvaluation. Either by growth of the company; which needs to be absolutely huge in some sectors – and I honestly do not see. Or by a significant fall in prices.

So stay away from China stocks?

I prefer business models with market entry barriers. What I see in China are largely interchangeable "Me Toos". Why should I buy for three times book value, the stock of a Chinese steel mill, if I could build one for carrying a new one?

Back to the home. They said initially that many European shares are attractively valued. How far the Dax is going to?

I am not a clairvoyant. But if you look at the quality of German corporations, their business models, expected especially in international comparison, then the impact will sooner or later in a higher index level. In the medium term, that is, in the next two to three years, should the Dax nearly 30 percent and more of it to be. This can also go faster.

Dr. Jürgen Meyer, head of German equities and € country is at SEB Asset Management