Frankfurt Stock Exchange
Frankfurt Stock Exchange is one of the world's largest trading centers, generating more than 90% German's markets turnover.
Founded in the year 1585, the Frankfurt stock exchange (FSE) is counted amongst the largest stock exchanges in the world. There are seven stock exchanges in Germany out of which it is this stock exchange which is the largest of them all. It is located in Frankfurt, Germany and since it is owned by Deutsche Borse it is operated by the same as well. The currency used for trading is Euro (EUR).
This stock exchange has more than three hundred market participants and in terms of dealings and turnover, this is the third largest securities exchange in the world. It contributes 85% of the securities turnover in Germany. The trading system used by this exchange is known as Xetra, which is a computerized trading system. Among its important features, traditional floor trading and electronic systems are the most striking characteristics.
There are more than 77000 securities listed with the exchange and 6823 quoted companies. Everyday, more than 260,000 trades are processed. In terms of market capitalization this stock exchange is the twelfth largest in the world. The total turnover is about 5.2 trillion Euros each year.
Trading Hours
The trading hours of Frankfurt stock exchange run from 9am to 5.30pm. Late DAX runs from 5.45pm to 8pm and the X-DAX runs from 5.45pm to 10pm. The stock trading of the Trading Time Floor starts from 9am and ends at 8pm while the stock trading for Trading Time Xetra starts from 9am and ends at 5.30pm.
Normally, there is trading from Monday to Friday with the exception of a few holidays which would be declared by the exchange in advance. Some of these holidays are Christmas Eve, New Year's Eve, Good Friday, Easter Monday and Boxing Day.
Trading Segments
The Frankfurt stock exchange encompasses the full spectrum of services and products that are part of exchange trading. These include trading from derivatives and securities by means of provision of market information and transactions and also the operation and development of electronic trading systems.
The trading process is carried out by brokers on the traditional floor trading and also by Xetra, the electronic trading system. The companies that are quoted on the Frankfurt stock exchange can enter the market in any of these three ways:
- Prime Standard - If the company chooses this method of entry to the market then it must observe the EU rules.
- General Standard - The companies that chooses this method to enter the market are regulated by the EU rules, just like the Prime Standard method.
- Entry Standard - This is a very easy way of entering the capital market. The exchange authorities supervise companies choosing this method directly.
Main Stock Indices
The main stock indices of the Frankfurt stock exchange are:
- DAX - This is a blue chip index which consists of thirty of the major companies in Germany that are trading on the FSE. The Xetra trading system provides the prices. This index also measures the performance of the German companies of Prime Standard in terms of their market capitalization and order book volume.
- MDAX - This is a stock index which comprises of German companies. Its owner, Deutsche Borse, calculates the index. It lists 50 Prime Standard shares from different sectors that are found immediately after the companies listed in the DAX index.
- SDAX - This is a selection index for fifty of the smaller German companies, also known as small caps. These companies are listed below the MDAX index and Xetra generates its prices. The companies are ranked according to their market capitalization and order book volume.
- TecDAX - This stock index tracks thirty of the largest German companies from the technology sector that rank below the companies listed in the DAX index.
- VDAX - This index depicts the variation margin of the DAX anticipated.
- Euro Stoxx 50 - Another important stock index of the Frankfurt Stock Exchange, this is designed by Stoxx Ltd for the purpose of blue-chip representation of Supersector leaders.
Exchange History
The exchange history of the Frankfurt stock exchange is one of the oldest in the world. It dates back to the year 1585 when a bourse was created for the purpose of trading. Hence the FSE was founded in 1585. In the year 1874, the location of this stock exchange was shifted to a new building at Borsenplatz. After the Second World War, in the year 1949, it was finally successful in establishing itself as one of Germany's leading stock exchange.
In the 1990s period, the Frankfurt stock exchange also functioned as a bourse for the Neuer Market. In 1993 it became Deutsche Borse AG. In the year 2002 and 2004 there were advanced negotiations for taking over the London Stock Exchange, which was the fourth largest stock exchange in the world, but the discussions broke down in the year 2005 and no attempts have been made in this direction ever since.
Written by: Goran Dolenc
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