Requirements for the New DAX Expand Member Companies

13 August 2021 | Updated: 13 August 2021

DAX index is Germany’s equivalent of London FTSE and the New York Dow Jones Industrial Average. Even though it measures the strength of the European and German economic health, it is one of the most popular and widely watched/followed stock market indexes worldwide. Furthermore, unlike many other leading indices, DAX factors its prices in reinvested dividend payments.

The companies that dominate DAX 40 are in the chemicals, financial, healthcare, automotive, and insurance sectors. Some of the most notable DAX 30 companies include BMW, Allianz, Siemens, and Bayer. The blue-chip index launched in 1988 comprises some of the largest 30 companies globally but expanding the number to 40 from September 2021.

The decision for the DAX expand from 30 to 40 is the most significant overhaul in its history. It comes in the wake of the Wirecard payments company scandal, which after only two years as a member of the DAX, filed for insolvency.
Trading With DAX
DAX index is a favorite trading strategy for many stocks, futures, and forex traders. It offers traders a high liquidity market, tight trading spreads, and longer trading hours. Forex traders using the DAX expand do not have to worry about any significant changes as they mainly affect the member companies.

Many of the best trading platforms, especially those covering global markets, assist forex and other traders in making the most informed trading DAX decisions. You can trade DAX 30 with any of the most common technical trading strategies such as Bollinger Bands, MACD, and Moving Averages. When you analyze entry, exit, and stop-loss points, using DAX 30 alongside support and resistant levels is also just as important.

A range of timeframes provided by the index also provides traders with more opportunities of making gains. Factors affecting the DAX price include market volatility, sociopolitical issues, Euro exchange rate, and trade and currency wars.

DAX Expand And What It Entails
The expansion to DAX 40 will diversify the index, but the criteria for membership of the new companies will undergo the following more rigid standards than it was in the past.

1. More regulated access rules
Following the Wirecard scandal involving a series of accounting frauds that led to its insolvency, the DAX index is making its access rules stricter than before. The first rule is that the last two financial reports of the companies seeking new membership should have positive earnings before interest, taxes, depreciation, and amortization (EBITDA).

2. Immediate exclusion for noncompliance and more demanding reporting obligations
The stringent rule set in March 2021 requires all DAX expansion members to publish their audited quarterly notifications and annual reports. The members get a 30-day warning period, after which they face immediate exclusion if they violate the requirements. Included in the new DAX index reporting rules are all the essential prime standard features.

This means that companies in the DAX index do not require a listing in the Frankfurt stock exchange-prime standard because their future on the regulated market is sufficient. The rule also facilitates faster and independent reaction by the index provider for any ember company flaunting the rules.

Requirements for the New DAX Expand Member Companies
3. Include a mandatory audit committee in the supervisory board
Another strict requirement for all the members of the DAX index is to have a required audit committee for proper governance. The recommendations set to start from March 2021 stipulate that an audit committee of the company should sit on the supervisory board as per recommendations of the German Corporate Governance Code.

The same also goes for the new companies with special structural features, such as those with partnerships limited by shares. The index will give all the existing companies a transitional period running up to September 2022 to set up the recommendations if they want to continue their stay with the DAX index community.

4. DAX indices scheduled for review twice a year
In the past, DAX carried a review on DAX indices only once a year, in September. However, as of 2021, with the entry of the new companies, the scheduled reviews will take place in March and September.

5. Selection of new member companies to depend solely on market capitalization
The DAX index used stock exchange turnover to rank the companies in the past or with the existing members. However, from September 2021, the market value or market capitalization will be the decisive factor in the rankings. The requirement will be for the member companies to have minimum liquidity, allowing the implementation of international standards to ensure the indices have sufficient liquidity.

6. No exclusion of Companies participating in controversial weapons
After several consultations, DAX dropped an earlier plan to ban companies involved in controversial weapons. Only a few respondents supported the proposal made it even easier for the index giant to accommodate the said companies.

Furthermore, passing the proposal would mean shutting out some of the most prominent member companies in the DAX index, such as Airbus, with its subsidiary for French nuclear weapon launchers. The proposal further agreed that addressing the rejection using sustainability criteria should be independent of the DAX index criteria.
Conclusion
DAX is the European Union blue-chip index and one of the most trusted and reliable places that people put their money expecting positive results. Besides attracting lots of industrial demand, traders also consider it their safety net and one of the main contributors to the growth of the German and European Union growth.

The insolvency of Wirecard, which was a significant contributor, did not see the index going down. Instead, the DAX expand from 30 to 40 demonstrates the consistency and flexibility of the German regulatory structures for the creation of friendly and modern environments for investing in the country.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Euro Rallies Largely on the Back of Dollar Weakness

25 May 2021 | Updated: 25 May 2021

Against the US dollar, the euro regains ground. EUR/USD is exchanging at 1.2255 in the American session, up 0.34 percent on the day. The euro has hit a new daily high of 1.2262, the highest since Jan. 4. The euro gained a foothold despite the vacation on Monday, and the rising trend has continued on Tuesday. The German Ifo Business Confidence Index for May surpassed, which impressed investors.

The euro has risen sharply today, while the German DAX and Stoxx 600 have set new peaks. Positive sentiments were boosted by a positive German business climate reading. For the time being, only the New Zealand Dollar and Swiss Franc outshine the common currency. Strong investor confidence, on the other hand, makes the Yen the worst currency, followed by the Dollar and then Sterling.

The Federal Reserve has maintained its stance that its ultra-accommodative approach will continue and that current QE levels will be maintained. Inflation rose sharply in April, prompting speculation that the Fed would consider reducing its quantitative easing program. This boosted the US dollar briefly in May, but the market appears to have embraced the Fed’s line that higher inflation is only temporary and that policy tightening is still a long way off. The US dollar has been under pressure as a result, with the euro and other major currencies continuing to rise.

Euro performance undeterred by Germany’s low GDP

Germany is a country that has an Ifo market climate increased to 99.2 in May, up from 96.8, exceeding the 98.1 forecasts. This is the highest amount since May of this year. The current assessment index increased to 95.7 from 94.1, exceeding the 95.5 forecasts. The expectations index increased to 102.9, up from 99.5, which was higher than the forecast of 101.0.

Manufacturing increased from 25.1 to 25.7, services increased from 3.5 to 13.7, trade increased from -0.5 to 8.4, and construction increased from 0.7 to 2.8. The strong euro has been unaffected by Germany’s poor GDP report for the first quarter.

Germany’s economy shrank by 3.2 percent year on year and 1.8 percent year on year (MoM). The revival of Covid-19 in the first quarter of Q1 hindered economic growth, and the German economy is technically in recession, with fourth-quarter GDP still in negative territory.

Amid the gloomy GDP survey, the outlook appears to be upbeat, as the vaccine rollout has culminated in a severe decline in Covid cases in the last week, and some German states are loosening health constraints.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

German Dax hits April 16 highs

18 May 2021 | Updated: 18 May 2021

Key Resistance: 15535
Key Support: 15355 – 15250

The German Dax has rallied 5% since it bottomed around 14820 late last week and now is retesting April 16 highs (all time highs) whilst breaking the short term structure and last week´s highs.

The last time the Dax traded at these levels it dropped 4.56% (710 pips) to the 14900 level.

In the short term, bullish targets have been hit at the 1.618 of the last leg down and printing a 1H bearish candle that engulfed the past 6 1H candles.

Historically, we have seen multiple drops at previous all time highs ranging from 4% to 15%.

We will pay close attention and manage this trade quickly should buying volume is detected.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

DAX 30 Shows Exhaustion Signs!

21 April 2021 | Updated: 21 April 2021

DAX 30 stock index drops at the time of writing after reaching a monthly resistance. Actually, a temporary decline could be natural. A retreat could help us to catch a new upside momentum.

As you already know, the German index registered a new all-time high of 15,521.6, so it’s risky to buy around this top. A corrective phase could bring new opportunities soon.

DAX 30 is traded at 15,112 level and it could slip lower after failing to stabilize above the R1 (15,447). The immediate uptrend line is seen as an important near-term target. Also, the index could approach the weekly pivot point (14,641) after registering the false breakout above the R1.

The outlook is bullish despite the current decline. Only a major reversal pattern and a drop below strong support levels will signal that DAX 30 could develop a larger drop.

You can join our VIP group HERE if you want to receive new buying or selling signals on DAX30.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

Olimpiu Tuns

Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.

DAX Performs Positively as Market Risk Mood Soars

15 January 2021 | Updated: 15 January 2021

Germany stocks traded higher on Thursday, as Transportation and Logistics, Industrials, and Media sectors saw significant gains. At the close of the market yesterday (Frankfurt time), the DE30EUR (DAX) grew by about 0.4%, while the MDAX and TecDAX rallied by 0.87% and 0.08%, respectively.

The best performers under the DAX were Volkswagen (DE: VOW3), which spiked by 4.5%. The Deutsche Bank AG (DE: DBK) grew by 4.1%, while the MTU Aero Engine (DE: MTX) rose by 3.16%.

Meanwhile, the worst performers of the session were Infineon Technologies AG (DE: IFX), which dropped by 1.5%. The SAP SE (DE: SAPG) fell by 1.22%, while the Deutsche Boerse AG (DE: DB1G) ended the day with -1.1%.

Altogether, rising stocks outnumbered plummeting ones on the Frankfurt Stock Exchange by 438 to 241, while 31 remained unchanged.

Meanwhile, the DAX volatility index (V1XI)—which monitors the implied volatility of DAX options—dropped by 8% to 21.37, a six-month low.

In other news, President-elect Joe Biden has hinted at a whopping $1.9 trillion to bolster the US economy, one of the worst-hit of the COVID-19 pandemic. This announcement was the crucial supporting factor for risk assets and indexes, like the DAX, over the week.

Paul Donovan, Chief Economist at USD Global Wealth Management, explained in a podcast that “realistically, it will be a stimulus that hits the second quarter, rather than the first, as Congress is not going to pass this at once, and almost certainly will not pass the proposals as they stand.”

Donavan noted that the Democratic support for additional state and local government aid and minimum wage increase are both likely to trigger strong opposition from Republican Senators.

The 50-50 split in the upper chamber could expose some parts of the package to filibusters unless bipartisan support for the bill can be attained. However, a bipartisan agreement at the moment seems very unlikely considering the recent political tensions that swept through the country.

Meanwhile, recent expectations that the vaccine rollout will essentially end the pandemic by the middle of the year has been thrown into uncertainty. New mutations of the virus, crawling distribution of vaccines, and scattered evidence of issues about the effectiveness of the vaccines are all adding to the growing concerns plaguing the market.

In Germany, Covid-related deaths have hit a record high, as the country reported 1500 deaths just 24 hours ago. Across Europe, especially in the UK, public healthcare facilities have reached their maximum capacities and are under pressure to admit more.

That said, Germany might go with the UK in extending lockdown restrictions through the end of the first quarter at least. Google mobility data show that activities across the continent have dropped significantly at the start of the new year.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.