Global Results, Long Distance ATX • Vienna Stock Exchange

2024 will bring changes on many levels: How will elections from India to the EU, from Austria to the US affect the economic environment? How is the war in Ukraine shaping up? Are central banks moving from “behind the curve” to the fast lane? Is inflation really tackled or fueled by new deficits? Does the good employment situation persist? How sustainable is the trend towards greening, AI and decarbonisation? All this is taking place against a backdrop of very weak economies, particularly in Austria and Germany.

In most equity markets, the year-end rally from 2023 continued in the first trading weeks of the year despite many unanswered questions. However, ATX's performance continues to lag behind. A weak domestic industrial economy may have played a role because, with a few exceptions, the index lacks stocks from sectors currently focused on information technology, diabetes manufacturers and weight-loss drugs or arms. ATX is even better positioned for a growing recovery, partly driven by exports, partly cyclical and driven by the prospect of a more favorable investment climate. As suppliers come back into the limelight, catch-up processes like automobile stocks also take a long time to come.

The rating gap is huge. As of February 27, P/E estimates for ATX ranged between 7.2 (2025) and 7.8 (2024), depending on the fiscal year. The corresponding ranges for the DAX were between 9.9 and 12.5 and for the S&P500 between 16.9 and 18.6. There is a long way to go to close this gap, especially since high capitalization has its own dynamics that can be explained, among others, by passive portfolio strategies and the reflection of market-wide indexes. Compared to the DAX, as a performance index it considers the reinvestment of distributed dividends and index growth is systematically higher than price indices such as the ATX. Given that the dividend yield is currently less than 3% on the DAX and 6% on the ATX, that certainly makes a difference. Although the road to closing the valuation gap is long due to industry structure and market size, the dividend yield makes the Vienna market attractive to investors, and some of the thematic hyperbole missed in Vienna is ultimately a flash in the pan. A flat vessel.

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Author:
Dipl.-Vw. Uta Pock, lic.oec.int.
Senior Research Analyst
February 29, 2024

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Note that

Wiener Porsche AG expressly points out that the information, calculations and charts presented are based on past values, from which no conclusions can be drawn regarding future growth or stability of value. Price fluctuations and capital losses are possible in bond trading. The article represents the personal opinion of the analyst and does not represent a financial analysis or investment recommendation of Wiener Borse AG.

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