German Stocks Gain, Led by Banks; Deutsche Post, Hochtief Climb

By Stefanie Haxel

Aug. 22 (Bloomberg) -- German stocks advanced, rebounding from a five-week low, as concern eased that writedowns and credit-related losses in the financial industry will spread.

Deutsche Postbank AG, Germany's biggest consumer bank by clients, and Commerzbank AG led the gain. Deutsche Post AG rallied the most in two weeks after Goldman Sachs Group Inc. recommended buying shares in Europe's largest mail carrier.

The benchmark DAX Index added 14.32, or 0.2 percent, to 6,251.28 as of 9:49 a.m. in Frankfurt, trimming this week's decline to 3 percent. DAX futures expiring in September rose 0.2 percent. The HDAX Index of the country's 110 biggest companies advanced 0.3 percent.

``The situation of financial stocks in the U.S. is slightly calming down,'' Tilmann Galler, a client portfolio manager who helps oversee about $25 billion at JPMorgan Asset Management in Frankfurt, said in a Bloomberg Television interview. ``Although bank shares started very weak, we got first buy recommendations for Lehman Brothers Holdings Inc.''

Ladenburg Thalmann & Co. upgraded Lehman shares to ``buy'' from ``neutral'' yesterday and Citigroup Inc. confirmed a ``buy'' recommendation on Aug. 20. Lehman, the largest underwriter of mortgage bonds before the subprime market collapsed, may write down about $4 billion in credit-related investments in the third quarter, JPMorgan Chase & Co. said Aug. 19, triggering a slump in financial stocks.

Deutsche Postbank gained 59 cents, or 1.5 percent, to 40.78 euros. Commerzbank, Germany's second-biggest bank, rose 27 cents, or 1.4 percent, to 19.885 euros. Larger rival Deutsche Bank AG rose 45 cents, or 0.8 percent, to 56.41 euros.

Deutsche Post

Deutsche Post increased 36 cents, or 2.3 percent, to 15.40 euros, the steepest advance since Aug. 5. The carrier is among companies looking ``most attractive on both a qualitative and quantitative basis,'' analysts including Keith Hayes wrote in a report to clients today, lifting his recommendation to ``buy'' from ``neutral.''

Hochtief AG surged 3.64 euros, or 7.3 percent, to 53.74, the largest gain in almost seven months. The country's biggest construction company may be broken up by its main shareholders, Spanish construction company ACS SA and Russian billionaire Oleg Deripaska, Manager Magazin reported, without saying where it got the information.

``We don't have any indication that ACS has plans to break up Hochtief,'' Hochtief spokeswoman Jutta Hobbiebrunken said in a telephone interview with Bloomberg News. ``These rumors come up from time to time.''

To contact the reporters on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.