Just escaping bankruptcy, the airline is now about to be kicked out of the Dax. Another Dax veteran is leaving the leading German index. Deutsche Wohnen is likely to move up for Lufthansa (ETR:LHA) – to the dismay of many investors.
After almost 32 years, Lufthansa will most likely have to relegate from the first German stock exchange league. After Commerzbank, ThyssenKrupp, Karstadt, Deutsche Babcock, Nixdorf Computer and Feldmühle, the airline , which has shaped the image of Deutschland AG for many years, is only the seventh founding member to say goodbye to the Dax. Other Dax pioneers such as Schering, Mannesmann, Bayerische Hypobank or Kaufhof left the leading German index due to mergers.
For Lufthansa, the ” Fast Exit ” rule of the German Stock Exchange is likely to be fatal: Because the price of the crane airline has fallen by a good 38 percent since the beginning of the year due to the Corona crisis, the free float-based stock market value dropped to around 4.9 Billion euro. This means that Lufthansa is no longer among the most valuable German corporations and no longer meets the retention criteria for a Dax membership .
The “Fast Exit” rule states that a value falls out of the Dax if it ranks worse than 45th in the free float market capitalization or in exchange sales. In return, an MDax value moves up that at least ranks in market value 35 lies.
The probable expulsion from the Dax should further burden Lufthansa, which has just been rescued, because LHA share should disappear from the sight of some international investments, which only pay attention to the Dax values.
While the Dax relegation is likely to be mourned at the airline’s headquarters in Frankfurt, cheers will probably break out in Berlin. For the first time in 14 years, a company from the capital could once again advance to the first German stock exchange league. The “Fast Exit” rule will most likely catapult Deutsche Wohnen into the Dax. The second largest German apartment rental company on the stock exchange is now almost as valuable as Henkel.