When Deutsche Börse introduced a new share index for the most important listed companies in 1988, Linde was already there. The German share index Dax has become a model of success over the years, and the composition has changed again and again. The globally active gases manufacturer is one of the few companies that has been part of it continuously – but not for much longer. Linde has now announced that it is leaving Frankfurt and the Dax and intends to focus on the New York Stock Exchange in the future.
The signal that emanates from this decision is fatal. Because it throws a harsh light on the German capital market, on its dwindling importance and its deficits. Companies, for example from the promising biotech industry, have been going to the USA for a long time when they want to go public and are looking for risk-taking investors, despite the much more rigorous financial regulator there, the SEC, which likes to crack down on misconduct. Now Linde, after all the most valuable listed company in Germany to date, is turning its back on Frankfurt.
Of course, the group is now largely Anglo-Saxon-American, four years after the then controversial merger with competitor Praxair. The decisions have not been made in Germany for a long time, so saying goodbye to Frankfurt only seems logical to some. But it also has to do with the lack of attractiveness of the German capital market. The volumes that are traded here are too small, the general conditions are bad – and yes, perhaps the financial supervision is too lax to create trust for investors. The Wirecard case, the background to which has still not been clarified, has caused further damage.
A functioning and attractive domestic capital market is vital for companies of all sizes. Here they can quickly raise capital for the business and attract shareholders. It has advantages if there are German or European stock exchanges. Not all want to be fully under the influence of international investors. Deutsche Börse has to come up with something.