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German stocks, punished for the nation’s trade ties to Russia and Ukraine, have gotten too cheap to turn down for some of Europe’s biggest investors.
Raiffeisen Capital Management is adding to holdings, with earnings at DAX Index companies poised to rise21 percentin 2014, according to more than 1,000 analyst estimates compiled by Bloomberg. JPMorgan Chase & Co. andABN AmroBank NV say valuations are compelling after the Ukraine crisis sentGermany’s benchmark gauge to 13.2 times projected profits, close to the cheapest level relative to Europe since at least 2005.By Namitha Jagadeesh,,,,,,,,,
After almost tripling between March 2009 and July 2014, the DAX retreated 10 percent in about a month, meeting the definition of a market correction. Escalating conflict between Ukraine andRussia, along with data signaling a slowdown in Germany’s economy, has erased nearly $180 billion from equity values. The DAX lost 0.7 percent on Aug. 22, paring a weekly gain, after Ukraine said Russia was invading the country under the cover of an aid convoy. It rose 1.2 percent at 9:09 a.m. in Frankfurt today.
Selling pushed the DAX’s valuation more than 2 percentage points below that of the Stoxx 600, the widest gap since at least 2005, according to data compiled by Bloomberg. Germany’s biggest companies will boost earnings by 21 percent in 2014, compared with increases of 9.6 percent in the European gauge and 10 percent for the Standard & Poor’s 500 Index, estimates compiled by Bloomberg show.