Suntech Power Shares Jumped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Suntech Power (NYS: STP) have jumped today on optimism in the important German solar market, and are shining brighter by as much as 17%.
So what: Following up yesterday's rally, today's move is partially being driven by comments from German Environment Minister Norbert Roettgen, who said the German market is almost expanding too quickly. Roettgen even went as far as to say that the market may need to be restricted in order to maintain sustainable growth.
Now what: Last year, the German government had aimed for total installations to reach 3 gigawatts; the number of actual installations decimated that goal by reaching 7.5 gigawatts. That number is a tremendous feat, considering that subsidies have been on the decline in what has become the world's largest solar market. Roettgen added, "We need to reduce new installations. Seven gigawatts a year is a no-go." With optimism returning to the sector, a small spark is all it takes to trigger rallies like today.
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