Frankfurt Stock Exchange
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A brief introduction to Frankfurt Stock Exchange
Established on the orders of Emperor Louis the German to hold free trade fairs, the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse in German) now known as the Deutsche Börse AG, ranks amongst the best trading centers of securities (stocks, bonds, corporate participating certificates, etc.) in the world today.
Historical Evolution of the Frankfurt Stock Exchange
The third Stock Exchange in the world, founded in 1585 after the Stock Exchanges of London and Paris, the Frankfurt Stock Exchange is managed by Deutsche Börse which owns it along with the European Electronic Exchange – Eurex and the clearing company Clearstream.
Possibly the biggest player in the European market with the trading index DAX having risen by a spectacular 21 percent in this current financial year (2007) alone thereby overtaking every other developed market in terms of profits acquired, the Frankfurt Stock Exchange enjoys around 85 percent of the total turnover of the German market. A fabulous turnaround from the turbulent days of
the integration of the West Germany with East Germany in the 1990s and the recession of 2003.
Nature of Trading in the Frankfurt Stock Exchange
The Frankfurt Stock Exchange may lose on the floors of the market during physical trading but it gains heavily in “Xetra” or Exchange Electronic Trading system, an advanced business procedure dealing in securities which is enlarging by the day and is based on the Eurex system.
Indices used in the Frankfurt Stock Exchange
The major trading index of the Frankfurt Stock Exchange is DAX or DAX 30 (Deutsche Aktien Xchange 30, earlier known as Deutscher Aktien-Index 30). With the prices derived from the global electronic securities trading system -Xetra, DAX or DAX 30 (as the name suggests) is a Blue Chip stock market index comprising of the 30 major German companies enlisted on the Frankfurt Stock Exchange .
Other indexes (indices) that also function in the Frankfurt Stock Exchange are
- DAXplus
- CDAX
- DivDAX
- LDAX
- MDAX
- SDAX
- TecDAX
- VDAX
- EuroStoxx 50.
Renowned DAX Companies of the Frankfurt Stock Exchange
- Adidas
- Volkswagen
- BMW Daimler Chrysler
- Siemens
- Deutsche Bank
- Lufthansa
- Allianz
- Bayer
The London Stock Exchange rejected a £1.35bn takeover bid from the Frankfurt Stock Exchange operator Deutsche Börse in December 2004. Both the Stock Exchanges were to merge to form ‘iX’ in 2000 that did not materialize under opposition from UK Brokers to add to a competitive bid from the OM Group which controls the Stockholm Stock Exchange.
The Frankfurt Stock Exchange is worthy of its position as the third-largest trading place for stocks also following up as the sixth in the world in terms of market capitalization.
