Porsche is soaring above the DAX index
In a significant shake-up of Germany's leading stock market index, the DAX, automotive giant Porsche and pharmaceutical supplier Sartorius have been announced to drop from the index, effective September 22. They will be replaced by Scout24 and GEA, moving up from the MDAX.
Porsche's decline is symbolic of the crisis in the German automotive industry, which has been struggling with declining profits. The luxury car manufacturer has suffered significant profit declines, leading to cost-cutting measures. Despite a successful initial public offering (IPO) at the end of September 2022, which celebrated one of the largest IPOs in German economic history, the shares of Porsche have seen a steep drop, with the current price hovering around 45 euros.
Sartorius, based in Göttingen, has also been affected by the industry downturn, suffering from the decline of the boom, high inventory levels at customers, and a weak market in China. In the past three years, Sartorius shares have halved in value. However, the company benefited from strong demand for its products during the corona pandemic, such as for the production of vaccines.
Membership in the DAX brings prestige and increased visibility to international investors. The weight of the automotive sector in the DAX has significantly decreased over the past ten years due to declining profits in the industry. Despite this, a descent from the Dax is not a one-way street, as demonstrated by Commerzbank's return to the leading index in 2023.
The market value of freely traded shares is decisive for the promotion and demotion of companies in the DAX. Changes in the DAX are not uncommon, with the Deutsche Börse reviewing the composition of the index quarterly. Interestingly, Lufthansa, which had to leave the Dax for the MDax in the summer of 2020, has been considered a candidate for a comeback, but did not qualify for the DAX promotion at the time.
As Porsche and Sartorius move down to the MDAX, Scout24 and GEA will join the DAX. Scout24 is a digital marketplace for real estate, while GEA is a technology group for food processing and agricultural technologies. The changes will mark a new chapter for these companies, bringing them increased visibility and prestige in the international investment community.
Read also:
- Understanding Hemorrhagic Gastroenteritis: Key Facts
- Stopping Osteoporosis Treatment: Timeline Considerations
- Trump's Policies: Tariffs, AI, Surveillance, and Possible Martial Law
- Expanded Community Health Involvement by CK Birla Hospitals, Jaipur, Maintained Through Consistent Outreach Programs Across Rajasthan
