German giants dazzle Dax

In the midst of the eurozone's worst-ever economic crisis, Germany's stock index scaled three successive record highs this week. Business daily Handelsblatt examined some of the top companies driving the impressive figures.

German giants dazzle Dax

Although the German economy might be widely considered to be remarkably robust, when the DAX scaled no less than three record heights this week it left analysts scratching their heads.

Better-than-expected jobs figures from the US no doubt had something to do with it. Communications giant Deutsche Telekom benefited from improved consumer confidence and there with strong sales of the iPhone5. On Wednesday shares rose by 4.7 percent to close on a seven-month high.

Allianz, Europe’s largest insurance company, also boasted substantial gains. Its shares, bolstered by significant profits in the first quarter of the year, rose 3.6 percent to hit a 5-year high.

Another upward mover was the Linde group, the world’s largest industrial gas company, whose share price rose to a record €149, before inching up another 2.8 percent.

Shares at pharmaceutical company Celesio rocketed on speculation published in the Platow Brief investor magazine that the Haniel group was planning to sell a portion of its stake in the company. However a spokesperson for the Haniel group later told Reuters news agency there were no plans to scale back its investment.

Chemical manufacturer Henkel was another major contributor to gains on the DAX. The Düsseldorf-based company performed better than expected thanks to strong sales of cleaning products and cosmetics. Shares increased by 5 percent, though that gain was tempered by poor figures in the glues sector.

But it wasn’t all rosy news on the German markets. Shares at ailing real estate company IVG plummeted almost 30 percent on Wednesday afternoon. Revenue fell by €31 million compared to the previous quarter.

All in all though, the Handelsblatt concluded, this week provided further evidence that Germany – unlike the rest of Europe – is continuing to weather stormy fiscal waters, leaving the economic outlook here bright – for now.

The Local/kkf

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‘Important not to be last’: Spaniard becomes first ever female to solo manage German DAX firm

Belen Garijo has taken over as CEO at German pharmaceuticals giant Merck -  the first woman to singlehandedly run a DAX 30-listed company - as Europe's top economy debates quotas for greater boardroom equality.

'Important not to be last': Spaniard becomes first ever female to solo manage German DAX firm
Belen Garijo. credit: picture alliance/dpa | Markus Scholz

Spanish-born Garijo, 60, who started in the new role on May 1, says she’s not content to be a one-off.

“It’s more important to me not to be the last woman at the top of a company than to be the only one,” the trained doctor recently told the newspaper Frankfurter Allgemeine Zeitung.

Garijo previously served as the group’s deputy chief executive officer and head of its healthcare unit.

Her immediate focus will be on Merck’s frontline role in the fight against Covid-19, with Garijo announcing that the firm will scale up deliveries in the months ahead of the lipids used in vaccine production for clients such as Pfizer-BioNTech.

“We are turning the house upside down to do that,” Garijo told German news agency DPA.

She is replacing Stefan Oschmann, 63, whose term ended after five years at the helm of the Darmstadt-based, family-owned group, which had never had a female chief executive in its 350-year history.

Garijo, a mother of two and a passionate Real Madrid supporter, is making history as the first solo female leader of a firm listed on Frankfurt’s blue-chip DAX 30 index.

German software group SAP made the first cracks in the glass ceiling in 2019 when it appointed Jennifer Morgan as co-CEO alongside a male executive.

However she bowed out last year after just six months, as SAP decided to switch back to a sole chief executive – Christian Klein – to steer it through the pandemic upheaval.

‘Hard work’

Although Germany has been run by a woman chancellor for nearly 16 years and Christine Lagarde heads the Frankfurt-based European Central Bank, female top executives remain a rare sight in Europe’s leading economy.

Germany’s gender pay gap is also one of the largest in Europe, with women earning about 21 percent less than men on average. But things are changing.

The German government introduced legislation in 2015 requiring women to make up 30 percent of supervisory board seats in large companies, and Chancellor Angela Merkel’s cabinet approved plans in January to introduce similar rules for executive boards.

Garijo, who previously ran Sanofi’s European operations, joined Merck’s healthcare unit in 2011.

She has been credited with overhauling the department’s research and development and refocusing attention on fewer drugs with better prospects, boosting sales and profits, according to the Handelsblatt financial newspaper.

Garijo for her part puts her success down to “hard work” and to having seized her chances “when they arose”.

She is not, however, a fan of legal quotas to promote women, even in the face of middling results from voluntary measures by industry.

“I am against all forms of discrimination, including positive discrimination,” she said.

‘It’s time’

Under the draft law approved by Merkel’s government earlier this year, listed companies with four executives or more must appoint at least one woman to their executive boards.

Included in the new legislation, companies in which the government holds a majority stake – such as the rail group Deutsche Bahn – will have stricter rules, with at least one woman on management boards with more than two members, and a 30-percent quota to come in the future.

The legislation, the object of a political tug-of-war ahead of a general election to pick Merkel’s successor in September, must still pass parliament.

Seventy-three groups would be impacted by the new rules, among which 32 currently have no female representation in the executive suite, according to government data.

Merkel, in power since 2005, has spoken out at foot-dragging by business leaders, against the resistance of some in her own conservative bloc.

“It’s time, following action with the surveillance boards, for something to finally happen with executive boards – it’s in the interests of the companies too,” said Katharina Wrohlich, gender researcher at economic think tank DIW, which has since 2006 compiled a barometer of female representation at Germany’s top firms.

At the end of 2020, they counted just under 14 percent women on their executive teams, versus around 35 percent on supervisory boards, giving ammunition to those calling for legal remedies.

SEE ALSO: Why German stocks just hit a record high