FRANKFURT (dpa-AFX) - The recent rally in Deutz shares was dampened on Wednesday. A capital increase caused the shares of the engine manufacturer to fall by up to eight percent in early trading. At midday, they were still down more than six percent at 5.71 euros. This meant that the shares brought up the rear in the second-line index SDax. This had recently risen slightly.

Deutz raised fresh money overnight to expand its business portfolio. The issue of a good 12.6 million new shares generated gross proceeds of around 72 million euros. This gives Deutz the flexibility to continue to invest in growth through acquisitions or the like once the purchase price for the takeover of Blue Star Power Systems has been paid. Deutz is currently expanding its business with the takeover of the US manufacturer of power generating sets.

Investors generally react to capital increases with a huff, as the increased number of shares reduces the earnings per share that can be attributed to each shareholder. However, if the fresh money is invested in profitable growth projects, this will benefit profit growth in the longer term.

Analyst Klaus Soer from the private bank Quirin still considers the valuation of the engine manufacturer to be "very attractive" due to its growth prospects in existing and new business areas.

From a technical chart perspective, the outlook remains positive. Despite the price slide in the middle of the week, the shares are still trading comfortably above all the important average lines that describe the short, medium and long-term trends.

These much-noticed lines were crossed at the end of June after considerations of a possible entry into the booming defense business became known. CEO Sebastian Schulte commented on this in the newspaper "Welt am Sonntag". The delivery of engines for wheeled tanks, armored personnel carriers and supply vehicles is being considered. The share price increase since then still amounts to around 15 percent./la/mis/jha/