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02.02.2007

Full Steam Ahead as Vienna Stock Exchange Enters New Year

  • Valuation remains favourable
  • Current environment favours shares


The Vienna stock market continues to offer numerous incentives. On the one hand, it is not too expensive, and on the other, the economic environment for ATX companies is looking extremely good. It is therefore quite possible that profit growth will accelerate during the course of the year, as was the case in 2006, says Alfred Reisenberg, chief stock analyst for Austria at CA IB International Markets.

While analysts are currently expecting profit growth of 5.2% in 2007, it is quite possible that growth forecasts will be revised upward once company results for 2006 are announced. By the end of the year, the ATX is expected to climb to 4,820 points.

Top Rating in Valuation Comparison
In fact, the ATX is putting on an excellent performance from any angle.   Compared to the ten-year Federal Government Bond, which currently yields a return of approximately 4.1%, the Vienna Stock Exchange offers an earnings yield of approximately 6.9%, a difference of almost 300 basis points. Compared to the MDAX, the European index which is most comparable to the ATX, the ATX trades at a discount. It is only against the DAX and EuroStoxx 50 that the ATX is slightly more expensive, but then these two indices are not expensively priced either.

The positive forecasts of UniCredit Group economists also provide cause for optimism, as they predict an end to the economic slump in the US. GDP is also expected to grow again from the second quarter onward. The biggest danger for global markets is the direction of interest rates. If, contrary to expectations, the FED were to raise interest rates again during 2007, this euphoria could quickly evaporate.

Recommendations
The favourites of the CA IB analysts are Austrian Airlines, Böhler-Uddeholm, voestalpine, Wienerberger and Zumtobel. Immoeast and Immofinanz have been downgraded to hold, after failing to reach their price objectives. 

Enquiries: Bank Austria Creditanstalt  International Markets
Veronika Fischer-Rief, Tel.: 050505 Ext. 82833,  e-mail: veronika.fischer-rief@ba-ca.com

Disclaimer

This document does not constitute an offer to issue or sell, or the solicitation of an offer to acquire or buy any securities to any person in any jurisdiction.

In the United Kingdom, this announcement is directed exclusively at persons who have professional experience in matters relating to investments who fall within Article 19 or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. In the United Kingdom, the securities will only be issued to such persons.

This press release is not an offer of securities for sale in the United States.  The Bonds and the shares referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States absent registration under the Securities Act or an exemption from registration. There will be no public offer of the bonds or the shares referred to herein in the United States.