Germany's DAX Index Grows From 30 To 40 Firms In Revamp
Umer Jamshaid 1 month ago Mon 20th September 2021 | 10:00 AM
Frankfurt, Sept 20 (UrduPoint / Pakistan Point News - 20th Sep, 2021 ) :Ten companies will join the DAX on Monday as the blue-chip stock market index undergoes its biggest facelift in its 33-year history in response to turmoil in the German corporate world.
At the opening of the market in Frankfurt at 9:00 am (0700 GMT), the new entrants, amongst them European aerospace giant Airbus and online shopping company Zalando, will turn the DAX 30 into a DAX 40.
The index suffered a turbulent year in 2020 that saw national carrier Lufthansa drop out of the top tier under pressure from the coronavirus pandemic and the collapse of payments company Wirecard after revelations of large-scale fraud.
Additions to the line-up are also meant to reflect the changing face of the German economy, bringing in tech companies like Zalando and the meal-kit supplier HelloFresh.
A number of the companies in the DAX were "founded in the century before last", he said, and younger companies would give the index more "momentum" going forward.
Frankfurt stock exchange operator Deutsche Boerse was "following international standards" with a broader and longer list of companies that better reflected the German corporate landscape as the "concentration of automotive and chemical companies is reduced," Kuhn said.
New rules to better regulate entry into the DAX will be implemented during the expansion, with the aim of preventing another damaging scandal.
In particular, all companies hoping to join the elite will have to demonstrate an operating profit in the past two years -- a test not all current members would have passed were the rules to apply retroactively.
As the flagship DAX index grows, the mid-tier mDAX will shrink from 60 to 50 companies, as some of its members are promoted.
But the addition of 10 new companies is not expected to change the index's value significantly. DAX members will be given new weightings within the overall index, with Airbus the largest among the latest arrivals.