The chemical giant’s share BASF has recovered significantly since the beginning of the month and has since performed almost twice as well as the DAX®. The government’s stimulus packages and improved leading indicators have recently given the chemical sector a boost. This may be of little comfort to long-term investors as the stock is still a long way from its all-time high. Nobody expects an imminent rally to the all-time high. According to Thomson Reuters, however, a large number of analysts are optimistic about the paper in the medium term.
According to its own statements, BASF is the largest chemical company in the world. The location in Ludwigshafen alone measures an area of 10 square kilometers. Over 106 km of road, 230 km of rail and access to the Rhine, 2,100 trucks, 400 railway wagons and 20 inland waterways are moved every day. The business of the old B.adic A.nilin & S.oda-F.abrik is divided into six areas: Chemistry (including paints and plastics), Materials (Performance Materials), Industry Solutions, Surface Technologies (including coatings for the automotive industry), Nutrition & Care (including Omega-3 for a healthier diet and Nutrilan for the Hair care) and Agriculture Solutions (including crop protection). The agricultural sector contributed around 30 percent to Group sales in the second quarter of 2020 and, in addition to the Nutrition & Care segment, sales of agricultural products even increased compared to the same period of the previous year. At the corporate level, however, BASF posted a double-digit decline in sales for the second quarter and a drop in earnings before taxes, depreciation and amortization by 77 percent.
In view of the corona-related uncertainties, CEO Martin Brudermüller is currently still reluctant to make forecasts for the full year. In addition, Wintershall’s IPO planned for the second half of the year threatens to be delayed. BASF had to post considerable write-downs here in the second quarter. However, the group put together an austerity program before the outbreak of the pandemic. Some measures are to be brought forward to 2020 instead of 2021 and make a positive contribution to the result. It remains to be seen whether they will inspire the paper. It is important whether the good leading indicators are followed by good economic data.
Chart technical outlook: BASF
Resistance marks: 53.90 / 57.60 EUR
Support tokens: 39.00 / 46.80 / 50.00 EUR
BASF shares have been on an upward trend since the beginning of August and are heading for the high from July. If the breakout above EUR 53.90 is successful, there is further upside potential from a technical point of view to EUR 57.60. On the downside, the share finds support at EUR 50. If the paper tips below the level, setbacks of up to EUR 46.80 can be expected.
BASF in EUR; Daily chart (1 candle = 1 day)
Observation period: January 15, 2020 – August 27, 2020. Historical considerations are not reliable indicators for future developments. Source: tradingdesk.onemarkets.de
BASF in EUR; Weekly chart (1 candle = 1 week)
Observation period: 08/28/2015 – 08/27/2020. Historical considerations are not reliable indicators for future developments. Source: onemarkets.tradingdesk.de
Bonus cap certificates on BASF shares for speculation that the stock will move sideways or moderately upwards
|Underlying||WKN||Selling price in EUR||Barrier in EUR||Cap (upper price limit) in EUR||Final valuation day|
|BASF||HR1DRU||68.45||38.00||72.00||December 18, 2020|
|BASF||HR1DRY||59.97||42.00||68.00||March 19, 2021|
Source: HypoVereinsbank onemarkets; As of: 08/27/2020; 1:45 p.m.
Express Reverse Convertible Bond Protect on BASF shares for speculation that the stock will move sideways
|Underlying||WKN||Issue price in EUR||Barrier in EUR||interest rate||Repayment date|
|BASF||HVB4NS *||100% of face value||80% **||4.6%||09/20/2023|
* In subscription until 17.09.2020 (subject to early closure); ** of the Reference Price on the Initial Observation Day; Source: HypoVereinsbank onemarkets; As of: 08/27/2020; 1:49 pm
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The contribution BASF – chemical giant relies on austerity and economic recovery! first appeared on onemarkets blog (HypoVereinsbank – UniCredit Bank AG).
Author: Richard Pfadenhauer