D.he race is on. In September 2021, ten more Dax places are available. According to the current status, new entries would be made (in order of probability): Airbus, Symrise, Zalando, Sartorius, Qiagen, LEG Immobilien, Brenntag, Siemens Healthineers, Hannnover Rück and Hello Fresh. The list shows: There are no heavyweights buried deep at Deutsche Börse that are now being lifted for investors. They are often decent medium-sized companies with a few thousand employees. The German stock market simply doesn’t give you any more.
The Dax will in future represent 94 percent of the stock market values in Germany. Such a concentration in the index is unique. In Japan, the 225 (!) Values of the Nikkei make up 60 percent of the total market. In America the 500 values in the S&P 500 are around 88 percent and in France the Cac 40 with its 40 values each covers only 75 percent of the market. In Germany now almost full coverage. All power to the Dax is the motto of the stock exchange.
Not a large majority in favor of enlargement
To call it a blue-chip index is presumptuous in an international comparison. It goes well into the medium-sized stock market values. The M-Dax, which was previously intended for this, will be deprived of a third of its market value and reduced from 60 to 50.
Why the whole thing? It is the hope to cover the German economy more broadly, to get new, digital business models in the Dax sooner or at all. However, due to the low distribution of listed companies in Germany, it quickly reaches its limits. The enlargement was therefore highly controversial. Of the 10 points proposed as reform by Deutsche Börse, it was the one with the tightest acceptance rate. Of the 32 financial institutions that responded, 19 voted for and 13 against. Of 42 companies, 26 for and 16 against, and 3 out of 6 for business associations. The Deutsche Börse index company Quontigo evaluates this as the “large majority of associations for companies and financial institutions”.
The majorities for eight further points are clearer. Most of them improve the Dax. Many aim to prevent a Wirecard case in the future. Anyone who does not submit their quarterly or annual report on time in the future will be given 30 days to submit it and will otherwise be removed from the index via a “fast exit”.
Less power of speculation
This is very useful and obviously necessary. Investors must have the certainty that their companies cannot simply do without reporting and that subsequent proceedings, as before, take years and are only operated with warnings and threats.