Stock market in germany


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Stock market in germany

  1. 1. BY: AKSHITA ALOK 768
  2. 2. STOCK MARKET A stock market or exchange is the center of a network of transactions where securities buyers meet sellers at a certain price. A stock market or exchange is not necessary a physical facility and with the advancement of information technology are increasingly rare those traders that exchange their stocks in the floor of a major stock exchange. The main stock market in the United States is New York Stock Exchange (NYSE). In Europe, examples of stock exchanges include the London Stock Exchange, the Paris Bourse, and the Deutsche Bourse. In Asia, the main stock exchanges include the Tokyo Stock Exchange, the Hong Kong Stock Exchange, and the Bombay Stock Exchange. In Latin America, there are such exchanges as the BOVESPA in Brazil and the MERVAL in Argentina.
  3. 3. The DAX (Deutscher Aktien IndeX, formerly Deutscher Aktien-Index (German stock index)) is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. Prices are taken from the electronic Xetra trading system. According to Deutsche Börse, the operator of Xetra, DAX measures the performance of the Prime Standard’s 30 largest German companies in terms of order book volume and market capitalization. It is the equivalent of the FT 30 and the Dow Jones Industrial Average, and because of its small selection it does not necessarily represent the
  4. 4. The L-DAX Index is an indicator of the German benchmark DAX index's performance after the Xetra electronic-trading system closes based on the floor trading at the Frankfurt Stock Exchange. The L-DAX Index basis is the "floor" trade (Parketthandel) at the Frankfurt stock exchange; it is computed daily between 09:00 and 17:30 Hours CET. The L- DAX index (Late DAX) is calculated from 17:30 to 20:00 CET. The Eurex, a European electronic futures and options exchange based in Zurich, Switzerland with a subsidiary in Frankfurt, Germany, offers options (ODAX) and Futures (FDAX) on the DAX from 08:00 to 22:00 CET. The Base date for the DAX is 30 December 1987 and it was started from a base value of 1,000. The Xetra system calculates the index after every 1 second since January 1, 2006.
  5. 5. Stocks in Germany had a positive performance during the last month. Germany Stock Market (DAX), rallied 92 points or 1.14 percent during the last 30 days. From 1970 until 2013, Germany Stock Market (DAX) averaged 2856 Index points reaching an all time high of 8694 Index points in September of 2013 and a record low of 372 Index points in November of 1974. The DAX Index is the benchmark index for the German equity market. It tracks the performance of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange, which represent around 80 percent of the market capitalization listed in Germany. The Index is free floating and has a base value of 1000 as of December 31, 1987.
  6. 6. WEIGHTING AND CALCULATION : The DAX indices are all calculated using capitalization weighted index using the total return Laspeyres index for Calculations. DAX Indices are weighted by shares. •The formula is: Current index = Current total market cap of constituents Previous Value / Previous Period In comparison, the Shanghai SSE indices use the Paasche weighted composite price index formula. This means that the index bases its calculations on its previous period for its calculations as compared to the Shanghai Composite Index, which bases it on the base period. The Base date for the index is 30 December, 1987 and it was started from a base value of 1,000. The Xetra system calculates the index after every 1 minute.
  7. 7. SELECTION : The index sample of the DAX is selected according to the following six criteria: •generally a company needs to be listed for at least three years prior •to the inclusion of its stock in the DAX; •the free-floating capital must at least reach 15%; •turnover; •market capitalization; •availability of early opening prices, and •branch representativeness for the German economy.
  8. 8.  Germany’s benchmark DAX Index (DAX) will climb to a record 9,000 by the end of the year as the euro-region economy returns to growth and investors brush off reduced U.S. Stimulus  If you look to the actual valuation numbers, price-earnings ratios for example, the Euro Stoxx 50 and the DAX numbers are quite equal. The DAX trades at 13.10 times estimated earnings, compared with 13.12 for the Euro Stoxx 50 Index.
  9. 9.  German election risk may have a bigger impact on the Dax rather than the euro. EURUSD is trading in a tight range and we think that this pair will be driven by dollar factors and the outcome of the FOMC meeting in the coming days.