The Frankfurt Stock Exchange made a false start on Monday with its Dax index, which lost up to 2% following a reform intended to rejuvenate its image.
At 9:51 a.m. On Monday (07:51 GMT), the Dax fell 1.83 percent to 15,206.99 points, its lowest since July, deepening its losses since the session opened. Most of the ten new stocks, which were previously listed on the Mdax of mid-cap stocks, are down, such as Airbus (-3.14% to 109.88 euros) and Porsche (-2.83% to 81.04 euros).
“The new DAX40 has fundamentally different characteristics than the previous formula,” says Andreas Lipkow, analyst at Comdirect. He attributes Monday’s poor performance to the current international situation, particularly the turmoil at Chinese real estate giant Evergrande.
The expansion of the Dax to forty stocks decided last year is supposed to make it more diverse and align it with international standards.
Two start-ups have entered the stock market elite – Zalando, an online retailer, and Hellofresh, a meal delivery service.
The fast-growing healthcare sector is becoming stronger with the integration of Siemens Healthineers, Sartorius, and Qiagen.
Also benefiting from its strategy of innovation and international expansion is the Symrise Group, a producer of fragrances and flavors.
In addition to Airbus, Brenntag and Porsche SE are new entrants to the Dax: the world leader in chemical distribution and the holding Porsche SE. Another well-known newcomer is the sports equipment maker Puma, which joins Adidas in the top league of the market.
Dax thus receives a facelift, but not a revolution, and will remain dominated by traditional industries, especially the automobile (Volkswagen, BMW, Daimler) and chemical (BASF, Bayer, Henkel) heavyweights, historical members.
Despite the reform, “the index lacks particularly young members from the technology sectors”, report CMC Markets’ analysts. Facebook, Amazon, and Netflix form the backbone of Wall Street’s listed companies.
“Apple is currently worth more than the entire Dax 40,” says CMC Markets, which sees this as a symbol of the “backwardness” of the stock market in the world’s fourth largest economy.