The Hannover Re share
Volatile capital market environment
Capital markets in 2012 were again heavily under the shadow of the unfolding sovereign debt crisis in the European Monetary Union and found themselves at the mercy of political decisions to an extent seldom seen before. The German DAX share index started the year at 5,898 points and climbed to 7,100 points by the beginning of April. In the second quarter, however, speculation surrounding the outcome of Greek elections – with potentially critical implications for the Euro – and a swing to the left in France fanned new doubts about the single currency, as a consequence of which the DAX had slipped to below 6,000 points by June. It was only the announcement by the European Central Bank (ECB) to the effect that it would henceforth support countries in distress through unlimited bond purchases that brought quick relief to the financial markets. The DAX made good lost ground in the following months and closed the year with a gain of 29.1% at 7,612 points. The MDAX improved even more strongly over the same period, ending the year at 11,914 points – a twelve-month gain of 33.9%. The Japanese Nikkei index also closed the year in comfortably positive territory, rising by a somewhat more modest 22.9% to 10,395 points. Only the Dow Jones, dogged by the protracted depressed state of the US economy, had to settle for a significantly poorer performance. The Dow ended the year at 13,104 points, a gain of 7.3%.