Frankfurt Stock Exchange (Frankfurt Wertpapierbörse)

Detailed Definition

Frankfurt Stock Exchange (Frankfurt Wertpapierbörse)

The Frankfurt Stock Exchange, known in German as Frankfurt Wertpapierbörse (FWB), is the oldest and largest of the eight regional stock exchanges in Germany. The FWB accounts for more than 75% of equity trading in Germany, making it the most significant stock exchange in the country and one of the world’s most prominent financial markets.

First founded in 1585 for the purpose of determining exchange rates, it wasn’t until 1820 that the Frankfurt Stock Exchange recorded its first live equity trading. Today, the FWB is owned and operated by Deutsche Börse AG, which is a significant player in the financial markets.

The main trading venue is Xetra, a fully electronic trading system catering to both institutional and retail investors. The primary market indicator for the FWB is the Deutsche Aktienindex (DAX index), which tracks the performance of the 30 largest, most liquid companies listed on the Frankfurt Stock Exchange.

Examples

1. BMW Group Listings: Public trading of blue-chip companies like BMW on the Frankfurt Stock Exchange, contributing significantly to the DAX index performance.
2. SAP SE: As one of the largest software companies globally, SAP’s performance on the Frankfurt Stock Exchange significantly impacts the index and the overall market sentiment.
3. Small and Mid-Cap Companies: These companies, though smaller in scale, still benefit from the exposure and liquidity provided by listing on the FWB.

Frequently Asked Questions

Q: What is the difference between the Frankfurt Stock Exchange and other regional stock exchanges in Germany? A: While Germany has several regional exchanges, the Frankfurt Stock Exchange is the largest and most significant, accounting for more than 75% of Germany’s equity trading volume.

Q: What role does Deutsche Börse play in the Frankfurt Stock Exchange? A: Deutsche Börse AG owns and operates the Frankfurt Stock Exchange, providing the infrastructure and regulatory framework needed for smooth and efficient market operations.

Q: What is the DAX index? A: The DAX index (Deutsche Aktienindex) is the main market indicator for the Frankfurt Stock Exchange. It tracks the performance of the 30 largest German companies listed on the FWB.

Q: Can foreign companies list on the Frankfurt Stock Exchange? A: Yes, foreign companies can list on the Frankfurt Stock Exchange under specific conditions, providing them access to Germany’s vast pool of investors.

Related Terms

• Xetra: An electronic trading platform operated by Deutsche Börse, through which the majority of trading on the FWB is conducted.
• Deutsche Börse AG: A German market organizer for the trading of shares and other securities. It owns the Frankfurt Stock Exchange.
• DAX Index (Deutsche Aktienindex): The primary stock market index tracking the performance of the 30 largest German blue-chip companies listed on the Frankfurt Stock Exchange.

Online References

• Frankfurt Stock Exchange Official Website
• Deutsche Börse Group
• Xetra Trading Platform
• DAX Index Information

Suggested Books for Further Studies

1. “The Frankfurt Stock Exchange: Evolution to Transformation” by Gilbert W. Meneken
2. “Deutsche Börse and The Globalization of Financial Markets” by Hilmar Kopper
3. “European Financial Markets and Institutions” by Jakob de Haan, Sander Oosterloo, and Dirk Schoenmaker
4. “Investing in Germany” by Tom Stevenson
5. “International Finance: Theory into Practice” by Piet Sercu

Accounting Basics: “Frankfurt Stock Exchange (Frankfurt Wertpapierbörse)” Fundamentals Quiz

Thank you for learning about the Frankfurt Stock Exchange, its historical significance, and its essential role in global financial markets!