German Stocks Soar in 2024: Low Expectations, US Exposure, and Election Boost

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BUSINESS 뉴스

GERMAN STOCK MARKET,SAP,US ECONOMY

The German stock market has experienced a remarkable surge in 2024, driven by a combination of factors including low initial expectations, strong performance from US-exposed companies like SAP, and the anticipation of a snap election that could lead to structural reforms and increased spending.

Several factors have contributed to the strong performance of the German stock market in 2024. Analysts point to low initial expectations, exposure to the robust US economy, and the upcoming snap election as key drivers. Sabrina Reeh, senior portfolio manager at DWS, noted that valuations were attractive at the beginning of the year and earnings surpassed forecasts. SAP, whose shares surged nearly 59%, played a significant role, accounting for 8% of the German market's year-to-date gains.

Maximilian Uleer, head of European equity and cross asset strategy at Deutsche Bank, highlighted SAP's strong cloud business performance and the company's confidence in raising its full-year targets. Deutsche Bank's Uleer also emphasized that DAX companies generate a higher proportion of revenue in the US, minimizing the impact of potential tariffs. While the collapse of the German government in November came as a surprise, analysts see the snap election as a potential positive for equities. 'From a market perspective, snap elections are perceived as an opportunity for more structural reforms and higher spending,' Uleer stated. This is particularly relevant as the manufacturing sector, a cornerstone of the German economy, has struggled throughout 2024

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