2006: a volatile stock market year ends on a positive note
The German equity market proved volatile in fiscal 2006. The DAX initially continued on the previous year’s upward path. However, concern about inflation and interest rates in the United States triggered a global market downtrend in May and June, with substantial falls in some stocks. Sound corporate profits and buoyant mergers and acquisitions activity revived investor confidence at the start of the second half and ushered in a new rally. The DAX ended the year up 22.0 percent at 6,597 points.
Performance of Bayer stock exceeds 18 percent
Bayer stock again developed very well, its price gaining 15.2 percent on the year. Including the dividend of €0.95 per share paid in 2006, our stock achieved a performance of 18.3 percent. This was only just below the DAX’s performance but slightly above the Dow Jones EURO STOXX 50SM index, in which Bayer is also included.
During the year the share price was driven mainly by factors relating to our acquisition of Schering, Berlin, Germany. The announcement on March 23, 2006 of our intention to acquire Schering triggered a period of turbulent trading in Bayer stock, with a very high turnover at times. The tide turned in mid-June 2006, when it became increasingly clear that our public takeover offer would succeed, and Bayer shares went on from there to gain over 30 percent by year-end.
A €1.2 billion capital increase as part of the financing of this acquisition raised the number of shares in issue by 34 million to 764.34 million. Market capitalization increased by a total of €5.3 billion (+20.5 percent) on the year, to €31.1 billion.