The Dax, the leading German share index, is to become more modern and attractive.

This is what Deutsche Börse has set itself the goal of, and a year ago it put a lot of effort into reforming it.

This had become necessary because the bankrupt with Wirecard got a Dax value, of all things, and the set of rules turned out to be unsuitable for quickly removing this company from the supposed elite league of Deutsche Börse.

Daniel Mohr

Editor in the economy of the Frankfurter Allgemeine Sonntagszeitung.

  • Follow I follow

Now comes the grand finale of the Dax reform: the increase from 30 to 40 values.

It has been clear since Friday evening who the new ones are: the European aircraft and armaments company Airbus, the Berlin online fashion retailer Zalando, the health group Siemens Healthineers, the fragrance and flavor manufacturer Symrise from Holzminden, the Berlin cookery box mail order company Hello Fresh, the vaccine supplier Sartorius from Göttingen , the VW major shareholder Porsche Automobil Holding, the chemical group Brenntag from Essen, the sporting goods manufacturer Puma and the German-Dutch biotech company Qiagen, which qualified just ahead of the Hamburg consumer goods group Beiersdorf.

Only a few women on executive and supervisory boards

Experts argue about whether this really makes the index more modern and attractive. But one thing is already clear: the Dax is becoming more masculine. The personnel consultancy Russell Reynolds took a look at the boards of directors and supervisory boards of the ten newcomers and found that there were only a few women to be found. Belén Garijo, the head of Merck, remains the only head of a DAX company: in the future, women's quota will be 2.5 percent. At the level below, it looks a bit more feminine, but the proportion of women is falling, because with Brenntag, Hello Fresh, Porsche, Sartorius and Symrise, five companies that do not have a single woman on the Board of Directors move up to the Dax. So far, this has only been the case with 4 DAX companies (13 percent), in the future there will be 9 (23 percent).

Only 7 of the 54 new DAX board members will be women. So far, the rate in the Dax was 19 percent, in the future it will only be 17.6 percent, the Russell experts have calculated. In the Norwegian leading index OBX, at least 30 percent are women, in the French CAC 40 22 percent. 

In future, the supervisory boards will also be made up of more men than they have been up to now. There will also be less participation by employees here. So far, 26 of the 30 DAX companies have a supervisory board made up of equal numbers of employees and shareholders. This is only the case twice for the new ten companies. Six do not need any employees on the supervisory board, in two companies it is a third. The reasons for the decreasing influence of the employee representation lie in the increasing internationalization of the Dax, which is being expanded to include companies with partly different structures and histories than previously typical: two companies operating as European stock corporation SE were not subject to co-determination when they were founded, which is included later changes in company size will be carried forward.According to the Russell analysis, this is the case with the Dax stocks Vonovia and Deutsche Wohnen as well as with the newcomers Brenntag and Hello Fresh.

Three companies are based abroad and are therefore not subject to German co-determination, the "old" Dax value Linde as plc based in Great Britain and Airbus and Qiagen based in the Netherlands.

For Porsche SE, there is an exception to parity co-determination as long as it is only active as a financial holding company.

As an essential business purpose, it holds a large block of shares in Volkswagen.

Two companies, the Dax stock Fresenius Medical Care and the newcomer Siemens Healthineers are considered subgroups of co-determined parent companies and are therefore not subject to parity co-determination.

This has not harmed the company's performance.

They get into the Dax because their share prices have developed strongly in recent months and years - based on good business success, also for the benefit of the employees.

The mix of industries is becoming more colorful

The good price development leads to a higher valuation than was the case with the "old" Dax companies.

According to calculations by the Landesbank Baden-Württemberg, the weighted DAX price-earnings ratio is a good 16. That of the new members is more than 35, so that the overall rating of the DAX increases somewhat.

The most important sector will be industry, which will benefit from the rise of Airbus.

In second place is chemistry with an unchanged share of 16 percent.

The auto industry is still in third place with around 11 percent, ahead of the health sector, which has increased from 8 to 10 percent.

With the rise of Symrise, the food / beverages area is now also represented for the first time.

So the mix of industries is becoming a little more colorful.

The index will be changed on September 20th. For every 100 euros invested in the previous Dax stocks, the index funds have to sell just under 17 euros and invest in the ten new stocks according to their weighting. In the M-Dax, which is reduced from 60 to 50 values, around 41 euros of the newcomers have to be sold out of 100 euros and invested in the remaining 50 values. After all, around 3.5 billion euros are invested in M-Dax ETFs, and around 16 billion euros in Dax ETFs.