Dax Index Adds 10 New Companies Ahead of the German Federal Elections
September 2021 will remain in history as the month when the German Dax index undergoes the biggest reform in its existence. Starting with September 20th, ten new companies will be added to the Dax index, and so the number of its constituents increases from 30 to 40.
One of the reasons cited for the change in the Dax is the need to add new companies that reflect the new economy. Truth be said, the Dax had underperformed its peers for some time now. For example, the S&P 500 index outperformed the German Dax index, and so did other indices in the United States.
The ten companies to be added to the Dax index are “promoted” from the MDAX. MDAX is an index tracking middle-sized businesses in Germany, and by adding the new companies, the number of constituents in the Dax increases, while the one in the MDAX decreases.
Puma, Zalando, or Airbus, are some of the names known by the general public that will be added to the Dax. Some other ones, not so popular, are equally important – Symrise, Sartorius, Qiagen.
Will the changes make the Dax index more attractive to investors? It remains to be seen.
Euro Traders Prepare for the German Federal Elections
The federal elections in the United States are scheduled on September 26th, and the market participants are aware that this is the main event in the Euro area for the rest of the year. The importance of it cannot be understated – Angela Merkel, the German Chancellor, will not be candidate, as she ends a long-lasting political career.
With only two weeks until the elections, the SPD, or the socialists, are rising in polls. Olaf Scholz, their leader, is now viewed as the one with the biggest chances to win the German Chancellor position. If the socialists do win, it will mark a change in the German leadership, and the markets embrace for changes in the fiscal space too.
All in all, an interesting September lies ahead for traders monitoring events in Germany. Because the German economy is the largest in the Eurozone, what happens in Germany will affect the common currency, the euro.
Text source: Forex Trading Blog
