Vienna Stock Exchange News

Market analysis on the Austrian stock market: Vienna Stock Exchange benefits from sector rotation

Ingrid Szeiler

The Austrian stock market has been stronger than almost any other this year. With an absolute gain of 25% (as of May 27, 2021), the leading index ATX has performed far better since the beginning of the year than most other markets that global investors usually have on their radar. For example, the DAX is up 13%, the S&P 500 is up 12%, and the technology index NASDAQ is up "only" 6%.  The ATX can also more than keep up with the MSCI World, which, with a plus of 10% at the end of May 2021, is also significantly below the performance of the Austrian benchmark index.

But what is behind this positive trend? As is almost always the case, it is the special structure of the Vienna Stock Exchange that influences the development and this time has ensured a flight to the top. In autumn 2020 there was a sector rotation worldwide: away from growth and towards value. The Vienna Stock Exchange, with its preponderance of listed financial and industrial companies, was able to benefit particularly clearly from this trend reversal. What was considered a drag for a long time has been playing to its strengths for some months now. Because at the moment it is just opportune to invest in companies of the old economy. And here the Vienna Stock Exchange has a few to offer: Post (+47%), Palfinger (+45%), OMV (+45%), Erste Bank (+39%) and Porr (+30%)2 , to mention just a few. We expect this development to continue. Because the fear of rising inflation is definitely there. And when inflation rises, interest rates rise. However, rising interest rates are usually disadvantageous for young, not yet well-established companies, because they often do not yet make profits and thus have to finance themselves more expensively with higher costs. The vast majority of companies in Austria's leading index are making profits and therefore have a clear advantage. 

The solidity of Austrian companies is now valued and sought after again by investors - after a lengthy lean period. The fact that many companies also play a pioneering role internationally in the area of sustainability is another plus point that is becoming increasingly important. 

Performance, Year to date, as of 27 May 2021

Ingrid Szeiler
Chief Investment Officer
Raiffeisen KAG
2 June 2021

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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.

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Oesterreichische Post AG
Palfinger AG
Erste Group Bank AG