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Aircraft construction in France: Airbus
will almost certainly belong to the Dax from September
Photo:
Frà dà ric Scheiber / imago images / Hans Lucas
It is the biggest reform of the German leading index Dax in its history: At the beginning of September, Deutsche Börse increased the Dax from 30 to 40 companies.
In addition, the index operator will make various other rule changes on the date - a package of measures with which the exchange is also reacting to the Wirecard scandal.
The payment service provider Wirecard admitted a billion-dollar gap in its balance sheet in June 2020 and filed for bankruptcy shortly afterwards - however, Wirecard was only removed from the Dax in August of the same year and replaced by Delivery Hero.
One reason for the late reaction was the stock exchange's outdated index rules, which were then updated.
So it was decided that the composition of the Dax will be reviewed more frequently in the future.
An important change, as Joachim Schallmayer, Head of Capital Markets and Strategy at DekaBank, finds: "This increases the permeability of individual companies between Dax and MDax," he says.
"This way, candidates for promotion could move up into the leading index Dax40 faster than before."
In the future, companies must also have been profitable for two years before being included in the leading index.
However, this rule does not apply to existing members - which the management of Delivery Hero should be particularly pleased about.
The delivery service has not made any profit since its inception.
Another reaction to the Wirecard case: companies in the Dax must from now on submit annual financial statements and quarterly reports on time and comply with certain selected corporate governance rules.
And: in future, when selecting the companies to be included in the index, only market capitalization on the stock exchange will be used as the decisive criterion.
The trading turnover of the shares, which was also decisive up to now, is no longer applicable - only a minimum turnover is expected.
Dax 40 - on par with the CAC40
It is on this basis that the most striking change in the index takes place, namely its increase: Since its invention at the end of the 1980s, the Dax has consisted of the 30 most important companies on the local stock market.
It has always been one of the smallest of the major indices on the world's stock exchanges.
The French CAC40, for example, consists of 40 stocks, the FTSE 100 in Great Britain is even 100. On Wall Street, 30 blue chips are also listed in the Dow Jones.
But there is also the S&P 500, which is more widely diversified and reflects the price development of no fewer than 500 companies that are listed on US stock exchanges.
In comparison, the Dax extension looks almost modest.
The stock exchange increases from 30 members to 40, which also means that the influence of each individual group on the index development decreases.
The newcomers, writes Christian Kahler, chief investment strategist at DZ Bank, in a study, will have a weight of 13 percent in the Dax.
The number of companies in the "little brother" MDax will be reduced from 60 to 50 at the same time.
The exciting question, however, is: Which are the ten companies that will be included in the Dax at the beginning of September?
Airbus, Porsche and Siemens Healthineers are considered safe Dax climbers
One answer is provided by the list of index candidates in the order of their market capitalization, which Deutsche Börse regularly updates on its website. According to this, there are some companies whose inclusion in the Dax in a few weeks seems almost certain due to their sheer size. There are also companies whose order in the ranking fluctuates around 40th place depending on the price development, and which are therefore aspirants with an uncertainty factor.
The aircraft manufacturer
Airbus
will be most certainly in the Dax in the future
. In the ranking of the market capitalization of all local listed stock corporations, the group ranks fifth, ahead of Dax big names such as BASF, Daimler and Deutsche Telekom. The fact that Airbus has not yet been listed in the leading index is only due to the fact that the share is mainly traded in Paris.
Also among the most reliable candidates are: the online fashion retailer
Zalando
(ranking 19th), the medical technology subsidiary of the Siemens Group,
Siemens Heathineers
(26), the fragrance developer
Symrise
(27), the cooker
box
order company Hellofresh
(28) and
Porsche Automobilholding
(29).
The chemicals
trader Brenntag
in 32nd place in the ranking should also be listed in the Dax with some certainty in the near future.
Stock exchange favorites Sartorius and Puma with good opportunities for promotion
This means that seven of the ten new places are as good as taken - three remain free.
And various other companies from the MDax are competing for them, for example: the laboratory technology company
Sartorius
, the sporting goods
manufacturer Puma
, the consumer goods manufacturer
Beiersdorf
, the diagnostics group
Qiagen
, the real estate company
LEG
or the insurer
Hannover Re
.
The expansion of the Dax share index from 30 to 40 companies will lead to greater industry diversification, says David Wehner, Senior Portfolio Strategist at Do Investment in Munich, with a view to the candidates (see also Wehner's favorites check in the box).
The Dax candidates in the checkfold out
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David Wehner
Airbus, Zalando, Siemens Healthineers, Symrise, Hellofresh, Porsche and Brenntag - if the Dax is expanded to 40 companies at the beginning of September, these companies will almost certainly be in the leading index according to the current status.
David Wehner
, senior portfolio strategist at Do Investment in Munich,
names
his favorites
for manager magazin
and gives a brief reason for them.
Expand the Porsche area
"The automobile company's share is valued favorably.
Porsche
offers high profitability and a dividend yield of 2.4 percent. The company is also pursuing a focused e-mobility strategy that makes the company interesting alongside Volkswagen, Daimler and BMW."
Open fire day area
"
Brenntag
is the world market leader in the distribution of chemicals and ingredients. The company supplies around 200,000 business partners around the world. As a result, Brenntag is broadly diversified across many industries. The high demand recently led to an increase in operating profit. Brenntag is growing steadily and solidly valued the company with a forward P / E ratio of 15.4 not expensive, especially considering the overall market. "
Expand the Symrisis area
"
Symrise
is a leading company for fragrances and flavors. Due to the high customer density in the consumer goods sector, the business model is not dependent on the economy. Symrise has seen steady profit and sales growth in recent years. The net margin is 20-23 percent. The company is With a P / E ratio of 47, it is valued more expensive than the average of the Dax 30 companies due to its steep growth path. "
Expand Siemens Healthineers area
"A leading provider in the field of medical technology and a global leader in MRI and CT technology.
Siemens Healthineers'
business model is independent of the economic cycle and offers constant and predictable cash flow through existing maintenance contracts Years. The company is currently benefiting from the special business with corona rapid tests. "
"The index is getting 'lively'", comments also DZ Bank chief strategist Kahler. "In addition to established corporations, some high-growth companies will be included. Shares from the health and medical technology sectors are gaining in importance." The shares of some corporations, whose products were particularly in demand during the corona pandemic, will also rise, according to Kahler. To speak of real newcomers to the investment world would, in his opinion, be a mistake. After all, the majority of these are corporations that have been established for years.
What the new composition of the leading index will actually look like, however, cannot yet be conclusively stated.
The decision will not be made until the end of August, and then the decisive factor is not the market capitalization at the end of the month, but the average weighted according to trading volume over the last 20 trading days.
Index effects might not materialize this time
This means that investors who may have relied on individual securities in the hope of making a price gain on inclusion in the index will have to be patient. The speculation would be understandable: If a company is included in an important index such as the Dax, this can result in a price increase. Eventually, the stock will get increased visibility and exposure. In addition, numerous investment and index funds almost inevitably access such stocks - that can also drive the price.
DZ Bank chief strategist Kahler, however, does not believe in large such "index effects" in the case of the Dax expansion in the candidate shares.
In his study, he writes that the topic has lost much of its importance in recent years.
Index changes are now much more transparent than in earlier times and can therefore be anticipated long in advance.
In addition, hedge funds have ensured that excess and under-returns gradually disappeared.
Many of the aforementioned DAX candidates have also recently put in a strong performance - whoever joins now may be too late.
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