Wirecard stays in the Dax

Dhe Deutsche Börse sees no reason to have the Working Group on Equity Indices meet unscheduled. Even after the bankruptcy application, Wirecard meets all the requirements to continue to belong to the German stock index Dax. The background to the regulation is that companies should not be prejudged. After all, a company can emerge stronger from an insolvency or at least continue to exist.

The immediate removal from the Dax would only take place if “the bankruptcy is rejected due to lack of assets” or a company is “in the process of being processed”, it says in point 5.1.1. of the guide to the stock indices of Deutsche Börse.

The fact that a CEO is arrested a few days after his resignation is irrelevant to the index. The exchange examines purely formal criteria. She doesn’t look at a balance sheet. It is not an accounting firm. The formal criteria include the regular submission of annual reports. In contrast, Wirecard has been in violation since the balance sheet for 2019 was postponed several times. But the stock exchange rules are mild here. Only “if an issuer repeats its annual accounts for several years, can it be excluded from the Prime Standard.” Membership in the Prime Standard, the most strictly regulated segment of the stock exchange, is a prerequisite for inclusion in the Dax .

No comparable cases

The stock exchange itself says that index rules could also be “developed further” if it makes sense. However, this first requires consultation with market participants, a process that usually takes several months.

The Dax-ETF owners will probably remain involved in Wirecard for a few more weeks. The quarterly review of the DAX composition took place at the beginning of June: Lufthansa was replaced by Deutsche Wohnen. The next date is September 3rd. Then Wirecard threatens to be removed from all indices due to the rapid decline in prices. The current market value of around 300 million euros could no longer be enough even for the S-Dax.

There have never been any comparable cases in the Dax. The metal company got into a serious crisis in 1993/1994, but was able to avoid bankruptcy and had to make room for Deutsche Telekom in 1996 in the Dax. The banks faced major difficulties in the financial crisis. The Dax Hypo Real Estate was removed from the index in December 2008. Commerzbank followed almost ten years later and had to make way for the new star in the German financial sky in September 2018: Wirecard. The stock market price skyrocketed to € 24 billion almost two years ago; today it is 98 percent less. Small consolation for Dax ETF owners: The Wirecard share in the index has marginalized to 0.03 percent. From now on, you can practically not care what happens.


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