Germany Stock Index, DAX 30 will turn into DAX 40 on September 20, 2021, which became even larger and incorporating ten of the largest companies from Germany’s MDAX listing. The additions 10 companies in DAX 40 will be Airbus, Zalando, Siemens Healthineers, HelloFresh, Symrise, Sartorius, Porsche Automobile Holding, Brenntag, Puma and Qiagen.

Here are some of the criteria for the new additions:

 DAX 40 will be considered for company liquidity levels instead of only considered stock exchange turnover for its rankings.

•      The new members must prove their profitability over the two most recent annual financial statements.

•     Must comply with the German Corporate Governance Code, which involves having an existing audit committee on the supervisory board.

•     DAX indices' single annual review has been replaced by two scheduled main reviews a year

•       Deutsche Boerse also stated that there will also be a requirement to publish timely quarterly statements and audited annual results.

Advantages of this addition

• A larger number of stocks in DAX 40 indices leads to higher trading volumes which are known as good for liquidity. 
• Quality improvement for the DAX indices raises the requirements to qualify for the index. 
• A more comprehensive diversification and overview of Germany’s Top 40 largest businesses, which indicates a wider range for other sectors covered. By raising the components, it can diversify the index so that one or two stocks will have less impact on the index. 
• Growth focused on newly added stocks. The renovation changed the dynamic of the index from traditional heavy industry to the more digital industry and areas of the German economy.

In short, the additions of the 10 companies provide a more comprehensive overview of Germany’s economy and an increase in the liquidity might benefit the traders and investors. With the strict requirements imposed, it also protects the investors from the case of scandal and fraud.

* Companies highlighted in green are the 10 companies added into the index