Emerging markets slowdown sparks warnings from German exporters
By Harro Ten Wolde and Patricia Weiss
FRANKFURT Oct 16 (Reuters) - A series of profit warnings by German companies in recent days highlights the vulnerability of small and midcap companies to emerging markets, which are now at best seeing weaker growth.
Chip equipment maker Aixtron, car parts supplier Leoni, construction machinery maker Wacker Neuson and fashion house Hugo Boss lowered expectations, all blaming developments in emerging markets and particularly in China.
Aixtron illustrated the dangers of relying on one Chinese customer after a shipment got delayed, while Hugo Boss saw its sales drop on weaker spending by Chinese tourists, sparking a sell off in the shares.
"We can't exclude that other bigger companies will lower their outlook because of China," said Heino Ruland a equity strategist at Frankfurt brokerage ICF.
Quarterly results from chemicals group BASF and industrial gases group Linde expected in the last week of October will be watched closely for the China impact.
The export-driven German economy has the highest exposure to China of all European countries, alone supplying almost half of all EU exports to the Asian country.
China was Germany's fourth-largest export market last year after France, the United States and Britain, accounting for 74.5 billion euros ($84.6 billion) or 6.5 percent of total exports, according to data from the German Federal Statistical Office.
China, the world's second-largest economy, is forecast to grow 6.8 percent this year, cooling from 7.3 percent in 2014 and the slowest pace in a quarter of a century, according to the median forecast of 62 analysts. Continuación...