FRANKFURT (dpa-AFX) - The Dax is the Dax after all: for the return of Commerzbank to the first German Borsen league at the end of February 2023, CEO Manfred Knof almost exuberantly rang the bell for the start of trading on the Frankfurt Borsen floor. Predecessor Martin Zielke had still commented emphatically calmly on the relegation of the Dax founding member from Germany's leading index in the fall of 2018 - in the year of the Dax's 30th anniversary, of all things: "Nothing at all changes for the importance of the bank for the German economy."

In fact, belonging to the now 35-year-old German Share Index is not just a matter of prestige. A place in the showcase of the German economy guarantees attention and attracts international investors. Index funds (exchange traded funds/ETFs) that replicate the Dax composition have to rebalance depending on the index composition, which usually affects the share prices of certain stocks. "The Dax is a leading index that carries international weight. And it will hopefully continue for the next 35 years," Deutsche Borse CEO Theodor Weimer said recently.

Introduced on July 1, 1988, the Dax today has an audience of millions: night after night at prime time, the current status is reported on television, the black scoreboard with the white curve from the Frankfurt trading hall is as much a part of Hesse's big city as its bank skyline.

Until the creation of the Dax, confusion reigned: Germany had more stock indices than stocks, foreign observers scoffed in the 1980s. There was an index of the "Borsen-Zeitung", one of the Commerzbank, one of the "Frankfurter Allgemeine Zeitung". Rüdiger von Rosen, who helped launch the Dax, later explained, "We wanted to have an outward-looking symbol, comparable to the Dow Jones."

In its early days, the new index traded as "DAI." But its founding fathers found that unsuitable in the long run. "It sounded too Japanese," later recalled Manfred Zaß, who had long held leading positions at Deutsche Borse and was later head of Dekabank. Moreover, "this somewhat wooden name" lacked "charm and symbolic power" in the emerging digital age. "Bull, bear and ibis already existed, so I took over from Index not the first, but the last letter," Zaß described. The name "Dax" was born.

For a long time, the Dax was dominated by four sectors: Chemicals, Automotive, Energy, Finance. Eleven companies have been listed in the index without interruption since the Dax was launched: Allianz, BASF, Bayer, BMW, Daimler (previously Daimler-Benz), Deutsche Bank, Eon (formed in 2006 from Veba and Viag), Henkel, RWE, Siemens and Volkswagen.

In the meantime, 30 groups in the first German Borsenliga have become 40: Deutsche Borse launched the expansion on September 20, 2021. The aim is to give a more representative picture of the German economy. For example, up-and-coming Internet companies should also have a better chance of gaining a place on the Dax.

In addition, as a consequence of the balance sheet fraud and delayed Dax expulsion of the Munich-based payment service provider Wirecard, stricter rules apply to companies that want to move up to the Dax and stay there. Only profitable companies will be admitted.

Investors can also benefit, especially if they have staying power: Since its launch on July 1, 1988, at 1163 points, Germany's most important stock market barometer has made strong gains. In the recent past, it went from record to record, and on June 16, 2023, the Dax rose above the 16,400 point mark for the first time in its history.

The lowest closing level of the Dax was quite a long time ago: on August 29, 1988, the Borse barometer fell to 1152 points. It also fell rapidly at the turn of the millennium after the bursting of the New Economy bubble on the Neuer Markt. At that time, the leading index fell to 2202 points on March 12, 2003.

The crash of Deutsche Telekom shares, which were touted as the "people's stock," and the bursting of the New Economy bubble continue to weigh on Germany's stock culture to this day. No wonder, then, that the majority of Germany's leading index is foreign-owned: According to an EY analysis from September, the majority of shares in at least 24 of the 40 Dax companies are held in custody accounts abroad./ben/DP/zb