21
Management report
2014 macroeconomic conditions
Economic situation
In the eurozone, real GDP increased by 0.8 per cent in 2014. This
moderate growth was driven by solid growth rates in Germany
and a recovery in crisis-hit countries such as Spain, Ireland and
Portugal. Economic growth in major members of the currency
union (Italy, France), on the other hand, disappointed in 2014.
The crucial factor in this trend is the structural deficits in those
countries.
Weak economic growth and falling commodity prices led to a
significant decrease in the inflation rate. Compared to the previous
year, the increase of 0.5 per cent in consumer prices is well below
the European Central Bank’s inflation target (just under 2 per cent).
The lower inflation prompted the ECB to loosen its monetary policy
still further. In this way, it managed to influence the interest-rate
landscape considerably in 2014. The money market rates again fell
slightly. For example, the 3-monthEURIBOR rate decreased from
approximately 0.3 per cent at the beginning of the year to below
0.1 per cent. The more remarkable development, though, could be
seen in the returns from government bonds. The return on the two-
year German government bond was even negative from August
onwards, while the ten-year bond was quoted at only a very
modest 0.65 per cent.
The US economy developed more positively than Europe in the
financial year ended. Real gross domestic product grew by 2.2 per
cent. The economic trend benefited from its broad and sustainable
overall positioning. This resulted in an increase in the USD’s value
from around 1.38 to 1.21 compared to the beginning of the year.
Equities and bonds
The positive economic data and corporate results from the
USA, plus declining oil prices, were also crucial factors in the
positive trend on the US stock markets in 2014. Despite a brief,
pronounced correction at the beginning of the year, the Dow
Jones and S&P posted new all-time highs in September/October
(S&P 500 plus 13 per cent in USD and over 28 per cent in EUR).
In terms of valuation, then, the US markets can certainly no
longer be regarded as cheap. In addition, loan-financed share
purchases are not far short of their all-time high and the mood
among investors had rarely been so positive. In Europe, the stock
markets – as measured by the DJ EURO STOXX 50 – rose only by
a modest 1.13 per cent. The DAX showed a slightly more positive
performance at plus 2.65 per cent. This meagre trend resulted
from the disappointing general economic data and negative
earnings revisions at corporate level. Austrian shares were among
the worst performers in Europe in 2014. The ATX lost almost 15
per cent of its value. The reasons for this were negative news from
the banking sector and the crisis involving Ukraine and Russia,
which overshadowed the – in international terms – comparatively
inexpensive Austrian stock market. Emerging markets’ shares
performed in a markedly heterogeneous manner last year. While
Asian markets in particular showed healthy increases, the central
and eastern European stock markets disappointed.
Contrary to general market expectations, 2014 was not the year
of increasing returns on US government bonds. Strong economic
data and a robust labour market were not enough to trigger an
increase in returns. One of the reasons for this development was,
of course, the sharp downturn in oil prices, which pushed worries
about inflation into the background.
