Deutsche Post announces plan to join Dax-30
Deutsche Post, Europe’s largest postal services group, will enter Germany’s blue-chip Dax-30 stock exchange index next month as part of a shake-up designed to reward companies with actively traded shares and a high market capitalisation.
The decision by Deutsche Borse, Frankfurt’s stock market operator, was a blow to Karstadt Quelle, the retailer, whose shares fell on Thursday after it was announced it would make room for Deutsche Post.
Conversely, the decision boosted the share price of Adidas Salomon, the sportswear maker, which had been widely tipped as the company that would drop out.
Membership of the Dax-30 elite is more than a matter of prestige because the share prices of companies in it tend to benefit from investment funds that track the index as a whole.
Deutsche Borse normally reviews the composition of the Dax-30 only once a year, but it made an exception in the case of Deutsche Post because the group’s E6.6bn ($5.9bn) initial public offering last year was so large. For an extraordinary change in the Dax-30 to take effect, a company needs to be among the top 25 German stocks in terms of market capitalisation and share turnover.
Deutsche Post met both conditions, ranking 19th in market value at about E13bn, and 23rd in trading volume, and will join the top index on March 19.
The stock exchange’s announcement had little immediate impact on Deutsche Post’s share price, since investors had already assumed it would enter the Dax-30 after its successful market launch last November.
However, Deutsche Post’s inclusion reflects the shifting emphasis in the Dax-30 towards companies specialising in high technology and services, and away from traditional industrial groups.
Recent entrants include Epcos and Infineon, technology groups spun off from Siemens, the Munich-based conglomerate, and Fresenius Medical Care.
Investors anticipate that Deutsche Borse may select MLP, the financial services group, as the next Dax-30 member at its regular summer review. If so, Adidas Salomon may find its reprieve short-lived.
Karstadt Quelle will drop down to the stock exchange’s second-tier M-Dax index.
Other changes to the M-Dax include the removal of KSB, the industrial pump manufacturer, Tarkett Sommer, the floor coverings group, and Klockner, the steelmaker recently taken over by investment group WCM. Joining the M-Dax are AWD Holding, the financial services company, and Norddeutsche Affinerie, the oil refinery group.
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