Germany: Wirecard: the decision to expel Dax is approaching – Bavaria

The days of insolvent payment service provider Wirecard in Germany’s highest stock exchange league are numbered. A food delivery service and a flavor maker are considered candidates for a Dax increase.

Frankfurt / Main – When will the scandalous insolvent group Wircard take off from Dax, investors wonder. There should be some clarity during the week. Deutsche Börse plans to publish the results of a consultation with market participants on the changes to the index rules by August 13 at the latest. The implementation then takes about a week. Wirecard is expected to leave Germany’s top stock market league in August – rather than after the index’s regular review in early September. Food delivery service Delivery Hero and fragrance and flavor maker Symrise are considered candidates for promotion in the Heavyweight 30 Index.

After criticizing the treatment of insolvent payment service provider Wirecard, implicated in a balance sheet scandal, Deutsche Börse announced a revision of the rules of the Dax stock index. Until now, a company should only be “immediately” removed from a selection index in the event of liquidation or the rejection of the request to open insolvency proceedings due to a lack of active.

Wirecard took over from Commerzbank in Dax in September 2018. Last June, the company admitted air bookings of 1.9 billion euros. Since 2015, the Munich prosecutor’s office has assumed responsibility for “commercial gang fraud” in the company.

The stock market turnover (volume of transactions) and the market value (market capitalization) of a company are decisive for joining the group of 30 DAX companies.

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The flavor maker Symrise, traded as a candidate for promotion, is little known to the public. The scents and flavors of the Holzminden-based manufacturer, on the other hand, can be found in many products – for example in shampoo, toothpaste or in food. The company, which employs more than 10,000 people, achieved a net profit of 304 million euros with a turnover of 3.4 billion euros last year.

Food delivery service Delivery Hero made a profit last year from the sale of its German business. But operationally, the company is still in the red. In June, Emmanuel Thomassin, chief financial officer, said he could not yet make a forecast as to when the current activity would cover costs. Delivery Hero operates local food ordering platforms in over 40 countries and employs 25,000 people. This year, the Berlin-based company is forecasting global sales of between 2.4 and 2.6 billion euros.

Index changes are especially important for funds that precisely track indexes (ETFs). It must then be reallocated, which usually has an impact on the share price. Belonging to Dax is also a question of prestige: especially for international investors, the most important German stock market barometer is the figurehead of the German economy. The composition of Deutsche Börse stock market indices is reviewed quarterly. The next regular date is September 3, 2020.

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