Dear Madam, Dear Sir,
One year ago, stock exchanges around the world saw severe price drops in the wake of the coronavirus crisis. Cyclical companies with mature business models were disproportionately penalized by investors at the outbreak of the pandemic. Investors who (re)purchased exactly one year ago are pleased to see a doubling of share prices today. One year after the corona-related low in the ATX, the Austrian national index has regained its position at 6,226 points (including dividends).
Experienced investors and entrepreneurs know: Success does not happen overnight; it is the result of years of work. With investing, it is the same: Investing is a marathon, not a sprint. Part of the training is enduring short-term fluctuations in the markets. The more experience, the calmer the pulse.
Analysts still consider the current valuation of Austrian stocks to be attractive. With P/E ratios in the ATX expected to be around 15 and a price-to-book ratio of one in 2021, there is absolutely no sign of a bubble in the Austrian market. Listed companies managed the health and economic crisis excellently and – wherever possible – fully maintained their productivity. With established business models and high R & D rates, their dividend strategy is also convincing. The ATX Total Return shows that the dividend factor has a strong influence on returns. In 30 years, dividends – if reinvested – accounted for half of the return of our national index, ATX. But only those who sow can also reap. A large share goes to international investors who appreciate the high quality of Austrian companies.
Financial education and incentives are needed to ensure that the Austrian population is also able to benefit, instead of suffering losses with savings accounts that no longer bear any interest. Reintroducing the holding period – and thus granting tax relief for long-term shareholdings – would be an important stimulus. In addition, our welfare state needs a program that also safeguards the next generation. A strong capital market can do just that: It secures prosperity for our children and provides capital for pioneers. Again, it will become evident that economies with developed capital markets benefit from faster and more sustainable growth. Proactively shaping and developing the capital market rather than just administrating it must become the guiding principle for the future.
Chairman Supervisory Board Wiener Börse
Deputy Chairwoman Supervisory Board, Wiener Börse
Managing Director Oesterreichische Kontrollbank
CEO, Wiener Börse