Delta Lloyd shares in 2012
A year of contrasts
2012 was another difficult year for investors, with ongoing concerns about stagnant economic development in the euro zone and the sustainability of the single currency. Government austerity measures to put public finances in order added to the uncertainty. Yet the first months of the year were marked by a cautious optimism as share prices rose and peripheral yields declined. This was partly because the European Central Bank (ECB) introduced a three-year long term refinancing operation (LTRO) in late December 2011. As 2012 progressed, however, fear and uncertainty returned to financial markets. Negative news flow from Italy and Spain in the spring caused peripheral yields to rise sharply and share prices fell. Hardest hit were financial stocks.
The second half of 2012 was marked by a slow but steady return of confidence in the euro zone. This was mainly due to a second ECB LTRO programme and several agreements between euro zone leaders that enabled the bailout fund to step in immediately to support struggling banks and established a European banking regulator. Ultimately, this resulted in peripheral rates declining sharply, as well those of the 'core' euro zone countries. The Amsterdam AEX-index rose by 9.7% in 2012. Interest rates on both government and corporate bonds fell to historically low levels due to the so-called ‘search for yield’.
Delta Lloyd’s share price (dividend adjusted) increased by 2.8% in 2012. This was well below the performance of the overall Dutch AEX-index (+9.7%) and more or less in line with the index for Dutch financial institutions. A different picture emerges if we analyse the stock’s performance (dividend adjusted) since our IPO, which shows Delta Lloyd outperformed nearly all other Dutch financial institutions in the period since 2009 in terms of price development.
Twenty analysts follow the Delta Lloyd share (2011: 19). Delta Lloyd is also increasingly recognised by sustainability bodies and appreciation for our efforts in this area has increased.