Description of DAX German Stock Index

By: Kavinesh_A

A stock exchange is that thing where the stocks, shares can be bought or sold by traders and stock brokers. Lots of facilities are provided by the stock exchange including different types of financial issues or any payment of dividends and income. There are several listed companies which are traded on stock exchange.

Dax is the abbreviation form of Deutscher Aktienindex. It is mainly German stock index which is based on 30 large German companies. Basically, Dax is a blue chip stock trading market index and the participating companies trading on the Frankfurt Stock Exchange in Germany. Dax was founded on 1st July 1988. From Xetra trading place the prices are taken. The operator of Dax is Deutsche Borse that is German Stock Exchange. According to German stock exchange, on the basis of market capitalization and the volume of the order book, Dax measures the real performance of the 30 major participating German companies. It is almost equivalent to the Dow Jones Industrial Average and also FT30. It is not important to represent the vitality of the whole economic system because of its small area of selection. German benchmark has an indicator that is L-DAX and Based on Borse’s floor trading, Xetra trading closes. Between 09:00 to 17:45 CET hours, L-DAX floor trade index have been daily computed at Frankfurt stock exchange. Moreover, the late/early (L/E) DAX index is calculated and computed from 17:45 to 20:00 CET hours and also from 08:00 to 09:00 CET hours. On the DAX Germany offers European electronic options (ODAX) and futures (FDAX) from 08:00 to 22:00 CET hours. 30th December 1987 is the base date for DAX and from a base value of 1000, it was started. From 1st January 2006, every after 1 second Xetra technology calculates the index. As of March 2009, the composition in DAX resistors or dax widerstände is 30 large companies.

There are two versions of DAX and those are performance index and price index which depends on the dividends that are counted. Total returns are measured by performance index which is more usually quoted. But in other countries price index is more frequently quoted index. There are several Prime Standard Industry groups which are included in DAX and those are banking industry, clothing, medical, securities, manufacture, and electronics e.t.c.

Price Weighted Index

A price-weighted index is basically a stock index where the index has been affected by each stock in the measurement of its market price per share. Whereas the index value is determined by joining the price of each share in that stock index and also splitting them by total stocks. Higher price rate share will be given more weighted index.

• Breaking Down of Price-Weighted Index

Assume there are two stocks contained by one index. One of the stocks priced at $1 and the other one priced $10. The weighted index of $10 is nine times larger than the weighted index of $1. For this, it is cleared that 90% of $10 stock and 10% of $1 stock is consumed by this index.

The index value will not be affected by a change in $1 stock, as it has really small percentage in the index. Dow Jones Industrial Average is the popular price-weighted market index.

Performance-Based Index

All dividends are included in the performance-based stock index. Over a selected period of time when the performance-based index is measured, before the index return it will add to any dividend amounts to the total stock price.

• Breakdown of Performance-Based Index

The Deutscher Aktienindex or DAX is performance-based index. Including company dividends, the benchmark standard performance with 500 poor’s index is determined. The investor can also check the capital gains with company dividends in the time of examining the total return of index money.

Price History of DAX

Above 12000 the performance index was closed for the first time on 16th March 2015. From the record, it is known that on 18th October 2017 the closing rate was 13,043.03 and intraday rate was 13,094.76.

In DAX resistors or dax widerstände there are 30 companies performance are measured by DAX and those companies are Adidas, BASF, Beiersdorf, Allianz, Bayer, BMW, Continental, Deutsche Bank, Commerzbank, Daimler, Deutsche Borse, Deutsche Post, E.ON, Deutsche Lufthansa, Deutsche Telecom, Fresenius, Heidelberg Cement, Infineon Technologies, Fresenius medical care, Henkel, Linde, Munich Re, REW, Merck, ProSiebenSat 1Media, SAP, Siemens, ThyssenKrupp, Volkswagen Group.

Definition of DAX 100

Deutscher Aktienindex 100 is a price-weighted index. Top traded 100 German stocks are represented by the DAX 100. By using the equalities of 30 DAX and 70 MDAX which was listed on the Frankfurt Stock Exchange in German, DAX 100 was established. MDAX has launched 50 equalities since 245th March 2003 and also the DAX 100 turned into HDAX. Moreover, the HDAX index uses to determine the development of prices if all shares in DAX30 or DAX, TecDAX, and MDAX.

Breaking Down of DAX100

A huge blue-chip index is represented by HDAX with compared to Deutscher Aktienindex or Dax. In the prime standard segment, all sectors of EU markets are covered by HDAX. The DAX30 or DAX, TecDAX, and MDAX are combined to form a price-weighted index HDAX. Here, 30 top most actively traded Frankfurt Stock Exchange companies are represented by DAX 30 or DAX. The MDAX is formed of traditional sector’s 50 mid-cap issues. TecDAX forms for technology sectors with 30 largest liquid issues.

Weighting and Calculation

By using the capitalization weighted index, the DAX indices are calculated. Deutscher Aktienindex or DAX indices are measured and calculated by shares. The formula of current index is

Current Index= current whole market cap of constituents x previous value per previous period

There are six criteria for selecting the index sample of DAX and those are

• Turnover
• A company has to be at least three years prior stock experience to be added in the DAX
• Market capitalization is one of the important criteria.
• Up to 15%, the free-floating capital must be reached
• The early opening prices should be available largely
• For the German economy system branch representativeness should be allotted.

By Kavinesh

© 2017 Kavinesh - All Rights Reserved

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