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Volatile development of the Hannover Re share
The Hannover Re share started 2016 at a price of EUR 105.65. The poor performance of stock markets early in the year, driven in particular by uncertainties surrounding the global economy, was also reflected in the development of the Hannover Re share. This was exacerbated by the ongoing intensely competitive environment in the reinsurance industry. The share continued to slide until mid-February, touching its lowest point of the year on 11 February 2016 at EUR 84.12. On the back of broadly more positive market sentiment and the publication of another record result for the financial year just ended, this negative trend reversed itself and the share posted steady price gains until 14 April 2016 – the date on which it reached its high for the year of EUR 106.20. In the months that followed the price was impacted by an elevated burden of large losses in the second quarter, causing the share to trend modestly lower. In the third quarter the share moved sideways. Towards yearend the share climbed slightly again, bolstered by favourable Group net income after nine months and a positive expectation for the result of the full 2016 financial year. In a protracted, relatively low interest rate environment the attractive dividend yield of the Hannover Re share also played a significant part here. The Hannover Re share closed the 2016 financial year down 2.7% at EUR 102.80; it thus recorded a performance of 2.1% including reinvested dividends in a stock market year shaped by a high degree of political and global economic uncertainties. Over the year the Hannover Re share thus performed somewhat more poorly than its benchmark indices, namely the DAX (+6.9%), MDAX (+6.8%) and the Global Reinsurance (Performance) Index (+16.5%) – although it should be noted that the considerably stronger performance of the Global Reinsurance Index can be attributed in particular to positive exchange rate effects from the translation of the US dollar. The Global Reinsurance Index tracks the share performance including dividend payments of the world’s 20 largest reinsurers. Hannover Re measures its performance by this benchmark index.
In a three-year comparison the Hannover Re share delivered a performance (including reinvested dividends) of 89.7%. It therefore once again clearly outperformed the DAX (20.2%), MDAX (33.9%) and Global Reinsurance Index (78.1%) benchmark indices.
Based on the year-end closing price of EUR 102.80, Hannover Re’s market capitalisation totalled EUR 12.4 billion at the end of the 2016 financial year, a decrease of EUR 0.3 billion or 2.7% compared to the previous year’s figure of EUR 12.7 billion. According to the rankings drawn up by Deutsche Börse AG, the company placed seventh in the MDAX at the end of December with a free float market capitalisation of EUR 6,169.8 million and thirteenth with a trading volume of EUR 3,827.4 million over the past twelve months.
With a book value per share of EUR 74.61 the Hannover Re share showed a price-to-book (P / B) ratio of 1.38 at the end of the year under review; compared to the average MDAX P / B ratio of 2.04 as at year-end the share thus continues to be very moderately valued.
