German Stocks Rebound From Four-Year Low, Led by Banks, Allianz

By Mike Gavin

Feb. 23 (Bloomberg) -- German stocks rebounded from a four- year low as investors speculated the U.S. government may boost control over Citigroup Inc.

Deutsche Bank AG, Commerzbank AG and Allianz SE gained at least 2.3 percent, leading financial shares higher. Siemens AG, which gets almost a fifth of its sales in the U.S., and ThyssenKrupp AG climbed more than 2 percent.

The benchmark DAX Index added 1.2 percent to 4,061.48 as of 12:04 p.m. in Frankfurt, while DAX futures expiring in March rose 0.5 percent. The broader HDAX Index advanced 1.2 percent.

“Today, the market is being driven by the news on Citi,” said Gerhard Schwarz, an equity strategist at UniCredit Markets & Investment Banking in Munich. “You’re seeing some technical bounce from some of the companies that have had significant losses recently.”

The benchmark for German equities has retreated 15 percent this year, closing at the lowest level since November 2004 on Feb. 20, on concern government measures will fail to revive the global economy.

Deutsche Bank, Germany’s largest, climbed 2.3 percent to 18.77 euros, following a 19 percent drop last week. Commerzbank, the second-biggest, added 2.8 percent to 2.92 euros. Germany’s government plans to appoint two independent experts with business knowledge to the supervisory board of Commerzbank instead of deputy ministers, Tagesspiegel am Sonntag reported.

Allianz, the country’s largest insurance company, climbed 3.7 percent to 54.38 euros, rebounding from a 19 percent decline last week. Munich Re, the world’s biggest reinsurer, rose 2.6 percent to 99.18 euros.

Citigroup Stake

Citigroup is in discussions with U.S. officials about an increase in the government’s ownership, the Wall Street Journal reported earlier today, citing people familiar with the situation. The government may end up owning as much as 40 percent of Citigroup’s common stock, while the bank’s executives would prefer the stake to be closer to 25 percent, the Journal said. Citigroup spokesman Jon Diat declined to comment.

Siemens, Europe’s largest engineering company, added 2.3 percent to 42.85 euros. ThyssenKrupp, Germany’s biggest steelmaker, gained 3.4 percent to 15.81 euros.

The following stocks also rose or fell in German markets. Symbols are in parentheses.

Celesio AG (CLS1 GY) climbed 4.3 percent to 16.40 euros after Morgan Stanley raised its recommendation for Europe’s largest drug wholesaler to “overweight” from “equal weight.”

Fresenius SE (FRE3 GY) rose 2.1 percent to 43.02 euros as Goldman Sachs Group Inc. raised its price estimate on the stock by 4.4 percent to 47 euros.

To contact the reporter on this story: Mike Gavin in Frankfurt at mgavin@bloomberg.net.