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Germany's benchmark Blue Chip DAX 30 index (Deutscher Aktienindex) expanded to 40 companies on 20 September adding 10 new members to the German stock index from the MDAX which will be reduced from 60 to 50 members.

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Qontigo's global index provider STOXX Ltd. announced the new composition of the DAX index marking a significant evolution of the index and of the German capital market, the biggest overhaul of its 33-year history, the exchange operator Deutsche Boerse (DB1Gn.DE)said.

The changes were triggered by the scandal around electronic payments company Wirecard AG, which was kicked out of the index last year after it disclosed a $2 billion accounting hole. The revamp of the index comes after the Act to Strengthen Financial Market Integrity, which tightened regulation for both companies and external auditors, became law in Germany.

The DAX index represents around $1.2 trillion in market value and the ex[ansion will include a wider scope of companies ,including more pharmaceutical and retail firms. Deutsche Börse also changed its admission criteria by opting for market capitalization only as opposed to market cap and trading volume before the overhaul.

New entrants also have to hold a minimum liquidity of €1 billion, equivalent to $1.19 billion, or 20% of their annual market cap.

The ten new DAX members came from the MDAX:

  1. Airbus (AIR.PA) - plane manufacturer
  2. Zalando (ZALG.DE) - online fashion retailer
  3. Siemens Healthineers (SHLG.DE) - health technology company
  4. Symrise (SY1G.DE) - flavour and fragrance maker
  5. Hellofresh (HFGG.DE) - meal-kit company
  6. Sartorius (SATG.DE) - lab equipment maker
  7. Porsche (PSHG_p.DE) - carmaker
  8. Brenntag (BNRGn.DE) - chemicals distributor;
  9. Puma (PUMG.DE) -m sportswear maker
  10. QIAGEN(QIA.DE) - genetic testing specialist

DAX 30 stocks before the addition:

  • Sorted by Market Cap.
  1. SAP SE O.N. (SAP) €148.3 billion SAP SE operates as an enterprise application software, and analytics and business intelligence company worldwide.
  2. LINDE PLC EO 0,001 (LIN) €137 billion Linde plc operates as an industrial gas company in North and South America, Europe, the Middle East, Africa, and the Asia Pacific.
  3. VOLKSWAGEN AG VZO O.N. (VOW3) €126.25 billion Volkswagen AG manufactures and sells automobiles primarily in Europe, North America, South America, and the Asia-Pacific.
  4. SIEMENS AG NA O.N. (SIE) €113.73 billion Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe
  5. MERCK KGAA O.N. (MRK) €89.3 billion MERCK Kommanditgesellschaft auf Aktien operates in the healthcare, life science, and performance materials sectors worldwide.
  6. DT.TELEKOM AG NA (DTE) €85.1 billion Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services worldwide.
  7. ALLIANZ SE NA O.N. (ALV) €81.77 billion Allianz SE, together with its subsidiaries, provides property-casualty insurance, life/health insurance, and asset management products
  8.  DAIMLER AG NA O.N. (DAI) €75.52 billion Daimler AG, together its subsidiaries, develops and manufactures passenger cars, trucks, vans, and buses in Germany and internationally.
  9.  DEUTSCHE POST AG NA O.N. (DPW) €73.44 billion Deutsche Post AG operates as a mail and logistics company in Germany, rest of Europe, the Americas, the Asia Pacific, the Middle East, and.
  10.  BASF SE NA O.N. (BAS) €59.68 billion BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface.
  11.  ADIDAS AG NA O.N. (ADS) €59.21 billion adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products worldwide.
  12. BAY.MOTOREN WERKE AG ST (BMW) €51.81 billion Bayerische Motoren Werke Aktiengesellschaft, together with its subsidiaries, develops, manufactures, and sells automobiles and motorcycles, and...
  13. INFINEON TECH.AG NA O.N. (IFX) €48.24 billion Infineon Technologies AG designs, develops, manufactures, and markets semiconductors and related system solutions worldwide.
  14. BAYER AG NA O.N. (BAYN) €46.76 billion Bayer Aktiengesellschaft operates as a life science company worldwide. It operates through Pharmaceuticals, Consumer Health, and Crop Science.
  15. MUENCH.RUECKVERS.VNA O.N. (MUV2) €34.29 billion Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft in Munchen engages in the insurance and reinsurance businesses worldwide..
  16. HENKEL AG+CO.KGAA VZO (HEN3) €34.13 billion Henkel AG & Co. KGaA, together with its subsidiaries, engages in the adhesive technologies, beauty care, and laundry and home care businesses
  17.  DELIVERY HERO SE NA O.N. (DHER) €32.26 billion 1.65% Delivery Hero SE offers online food ordering and delivery services. It operates in 44 countries in Europe, the Middle East, North Africa, Asia,
  18. VONOVIA SE NA O.N. (VNA) €31.87 billion Vonovia SE operates as an integrated residential real estate company. It operates through four segments: Rental, Value-Add, Recurring Sales, and...See Company
  19. FRESENIUS SE+CO.KGAA O.N. (FRE) €29.2 billion Fresenius SE & Co. KGaA, a health care group, provides products and services for dialysis, hospitals, and outpatient medical care worldwide.
  20.  E.ON SE NA O.N. (EOAN) €29.07 billion E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, rest of Europe, and internationally.
  21.  DEUTSCHE BOERSE NA O.N. (DB1) €26.87 billion Deutsche Börse AG operates as an exchange organization in Europe, the United States, and the Asia-Pacific.
  22. BEIERSDORF AG O.N. (BEI) €23.36 billion Beiersdorf Aktiengesellschaft manufactures and distributes consumer goods in Europe, the Americas, Africa, Asia, and Australia.
  23.  RWE AG INH O.N. (RWE) €22.66 billion RWE Aktiengesellschaft produces and supplies power through renewable and conventional sources primarily in Europe and the United States.
  24. CONTINENTAL AG O.N. (CON) €22.27 billion Continental Aktiengesellschaft develops products, systems, and services for customers in various industries worldwide. The company operates
  25.  DEUTSCHE BANK AG NA O.N. (DBK) €21.87 billion Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services to private individuals, corporate entities
  26. FRESEN.MED.CARE KGAA O.N. (FME) €19.13 billion Fresenius Medical Care AG & Co. KGaA, a kidney dialysis company, provides dialysis care and related services, and other health care services
  27. DEUTSCHE WOHNEN SE INH (DWNI) €18.04 billion Deutsche Wohnen SE develops and manages residential properties in Germany. The company operates through four segments: Residential Property
  28. HEIDELBERGCEMENT AG O.N. (HEI) €14.58 billion HeidelbergCement AG produces and distributes cement, aggregates, ready-mixed concrete, and asphalt worldwide. The company provides cement
  29. COVESTRO AG O.N. (1COV) €11.08 billion Covestro AG develops, produces, and markets polymer materials for various industries worldwide. The company operates in three segments:
  30. MTU AERO ENGINES NA O.N. (MTX) €10.34 billion -10.48% MTU Aero Engines AG develops and manufactures engines and offers commercial engine services and support.

Changes were made in all the German indices, the DAX, MDAX, SDAX and TecDAX.

The expansion of the DAX concluded a comprehensive reform process which started in the summer of 2020. Several new rules were implemented gradually during the last nine months.

The new rules makes the German index more aligned with its international peers. For example in the U.S.potential members of the S&P 500 have to post four consecutive quarters of accumulated profits. Deutsche Börse also clarified the time frames during which companies have to file their financial reports, allowing the index operator to expel firms that fail to submit their statements on time. While some of the changes took effect in December, others became effective in March. Certain requirements apply from this month.

Key Points

  • Effective since December 2020 DAX candidates must havea positive EBITDA in their two most recent annual financial statements.
  • Effective since March 2021 Index eligibility extended to all issuers in the Regulated Market of the Frankfurt Stock Exchange.
  • Financial reporting requirements with specified sanctions for non-compliance introduced.
  • Adherence to certain provisions relating to audit committees in the German corporate governance Code.
  • Additional DAX review introduced for March according to Regular Entry and Regular Exit criteria.
  • Effective since September 2021 Ranking according to the single parameter market capitalization.
  • Introduction of minimum liquidity requirement.
  • DAX expanded to 40 constituents and MDAX reduced to 50.

The new rules makes the German index more aligned with its international peers. For example in the U.S.potential members of the S&P 500 have to post four consecutive quarters of accumulated profits. Deutsche Börse also clarified the time frames during which companies have to file their financial reports, allowing the index operator to expel firms that fail to submit their statements on time. While some of the changes took effect in December, others became effective in March. Certain requirements apply from this month.

Stephan Flaegel, Chief Product Officer, Indices and Benchmarks at Qontigo said: "We are completing the biggest DAX reform in our history, manifesting the DAX as the German Blue Chip index which will represent a larger spectrum of the German capital market. The qualitative improvements and alignment with international standards are largely owed to feedback from market participants. Together, we have put the DAX index family in the best possible position for the future."

“It should go without saying that Germany’s most important index not only includes the largest and most important companies, but also takes into account their profitability and thus the future viability of their business model,” said Ralf Thomas, CFO of technology firm Siemens AG.

The next scheduled index review is 3 December 2021.

Further information: Results of the market consultation Current ranking lists DAX®, MDAX®, SDAX® and TecDAX® are registered trademarks of Qontigo Index GmbH.

About Qontigo

Qontigo is a leading global provider of innovative index, analytics and risk solutions that optimize investment impact. As the shift toward sustainable investing acceler-ates, Qontigo enables its clients—financial-products issuers, capital owners and asset managers—to deliver sophisticated and targeted solutions at scale to meet the in-creasingly demanding and unique sustainability goals of investors and asset owners worldwide.

Qontigo's solutions are enhanced by both our collaborative, customer-centric culture, which allows us to create tailored solutions for our clients, and our open architecture and modern technology that efficiently integrate with our clients' processes. Part of the Deutsche Börse Group, Qontigo was created in 2019 through the combi-nation of Axioma, DAX and STOXX. Headquartered in Eschborn, Germany, Qontigo's global presence includes offices in New York, London, Zug and Hong Kong. www.qontigo.com

About STOXX

STOXX Ltd. is Qontigo's global index provider, currently calculating a global, comprehensive index family of about 13,000 strictly rules-based and transparent indices. Best known for the leading European equity indices EURO STOXX 50, STOXX Europe 50 and STOXX Europe 600, STOXX Ltd. maintains and calculates the STOXX Global index family which consists of total market, broad and blue-chip indices for the regions Americas, Europe, Asia/Pacific and sub-regions Latin America and BRIC (Brazil, Russia, India and China) as well as global markets.

STOXX is the administrator of the STOXX® and DAX® indices under the European Benchmark Regulation and exercises control over all benchmark administration processes within Qontigo. STOXX indices are licensed to more than 600 companies around the world as underlyings for Exchange Traded Funds (ETFs), futures and options, structured products and passively managed investment funds.

Source: Qontigo

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