The price of the Deutsche Bank share saw a recovery in 2003: with a one-year gain of nearly 50% we were a top performer in our international peer group. We also far outperformed the German share index DAX, which rose around 37% after plunging 44% in the preceding year. Germany’s stock market thus beat all other major industrial countries in 2003; only the technology-weighted NASDAQ Composite Index in the U.S. staged a stronger recovery. The above-average appreciation of our share price reflects the market’s recognition of our new strategic focus, improved results, shareholder-friendly share buyback programs and increased attractiveness of our share, especially among foreign investors.
Shifts in financial market sentiment. Markets experienced a roller coaster year in 2003. The start of the year was overshadowed by major political and economic uncertainty. Markets were burdened by worries over the effects of the war in Iraq, which led to a major sell-off in February and March. Insurance and financial stocks in particular suffered from investor distrust. In this tense environment, the price of the Deutsche Bank share fell to an annual low of € 32.97 on March 12.
The unexpectedly rapid end to the war in Iraq had an initial calming effect on international markets. As investor confidence gradually returned, deflationary worries subsided and interest rates fell to historic lows, sentiment turned in the following months. Buoyed by a more benign market environment and the prospect of good quarterly results, our share climbed back to € 60 within three months. By the end of November our share price was fluctuating between € 60 and € 53.
During the last weeks of the year the international economic climate brightened further. The increasing likelihood of a cyclical upswing improved market sentiment, while buyers were lured by low valuations. Confidence in stock market investing increased, in particular among private and smaller institutional investors. Foreign investors’ concerns over Germany’s ability to enact reforms and sustain its economy also abated. Amid this far brighter basic sentiment towards the end of the year compared to earlier in the year, the Deutsche Bank share reached an annual high of € 66.04 on December 30, having more than doubled from its annual low.