Since the beginning of the year, the Austrian equity market has registered an increase of almost 20% and thus recorded slightly better performance than the DAX or the Eurostoxx 50. Despite this, the valuation of the ATX is still low from a historical perspective. For example, the book value is just over 1, whereas the DAX shows a figure of 1.8. This low book value also does not reflect the actual value of the companies listed in the index. Reasons for the low valuation probably still include the negative ramifications of the Ukraine/Russia crisis, because many Austrian companies are facing considerable difficulties and currently not generating any earnings in these regions as a result of the conflict. Nonetheless, investors’ negative sentiment on Austrian companies in relation to their Eastern European activities could easily swing around quickly, if there is a sustainable easing of the political tensions between Russia and Ukraine. This would result in a fundamental improvement in the outlook for some ATX-listed companies, and a return to positive earnings developments would be quite conceivable. Due to the preponderance of financials, the Austrian ATX has already suffered significant setbacks in recent years, and now these companies which had expanded strongly into Eastern Europe are facing additional burdens as a result of the Ukraine/Russia crisis.

In these challenging conditions, actively managed funds are once again able to show their strengths compared to simple index-tracking investments. Because being able to exclude certain names is equally as important as being able to selectively pick others when it comes to making a successful investment. The fund management of Raiffeisen-Österreich-Aktien is currently strongly focused on real estate companies, as these firms continue to trade below book value compared to their European peers. The portfolio also includes technology stocks, such as AT&S and AMS, which are not even represented in the ATX. In general, the fund is very active among companies that are not listed in the index, for example with names such as Strabag, AMAG, Do&Co and Porr AG.

Ingrid Szeiler
Chief Investment Officer
Raiffeisen KAG
1 June 2015


Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.