Annual Report 2010 - Muenchener Hypothekenbank eG

14 | 15 münchener hypothekenbank eg | annUaL report 2010 management report in the capital market, the value of bonds issued by weaker euro- zone states fell significantly as their credit spreads widened considerably. Bonds issued by banks also suffered because of the sovereign debt crisis. in particular, banks in the weaker euro-zone states found it nearly impossible to tap the market. the stricter supervisory requirements planned per Basel iii and the increased liability risks for senior unsecured bank bonds placed greater burdens on the holders of these bonds, and supported the growth of the covered bond segment. the german pfandbrief market was able to set itself even further apart from the other instruments in the covered bond market in 2010. it benefited from moderate spreads during the first half of the year as a result of the european central Bank’s (ecB) purchasing programme for covered bonds. the favourable devel- opment continued even after the end of the programme. Jumbo bonds with a total volume of nearly € 150 billion were issued in the european covered bond market in 2010. Just under € 35 billion worth of bonds were issued in the segment of bonds higher than € 0.5 billion and less than € 1.0 billion – so-called sub-jumbos –, or about four times higher than in the previous year. the market share for the german Jumbo pfandbrief shrank to 12 percent as total sales of german pfandbriefe fell from the same year-ago figure of € 79 billion because fewer public pfandbriefe were issued. sales of € 38 billion were noted for the mortgage pfandbriefe segment, and the same amount was also posted for public pfandbriefe. driven by the economic recovery as well as by very good cor- porate profits, stock markets grew worldwide. the particularly robust development in germany benefitted the dax, which climbed to more than 6,900 points, or 16 percent over the same figure at the end of the previous year. the dow Jones index also posted strong growth as it advanced by 11 percent. investors’ fears of growing inflation rates and of the failure of government bonds led to a restructuring of portfolios, with an emphasis on stocks, property and gold. stocks benefitted from high dividend yields in some instances and from asset value considerations. “the Pfandbrief affirmed its position as a quality product in 2010 and developed more favourably than other covered bonds.” 1.0 2.0 3.0 4.0 yieLd on ten-year bUnds 2010 figures in % january february march april may june july august september october november december