The DAX is Germany's most important stock market index. It is composed of Germany's 30 largest companies by market capitalization that are traded on the Frankfurt Stock Exchange. The DAX is calculated in real-time throughout the trading day and measures the performance of these 30 companies. To be included in the DAX, companies must have been publicly listed for at least three years and meet requirements around free float, turnover, market capitalization, and representation of the German economy.

1. BY:
AKSHITA ALOK
768

2. STOCK MARKET
A stock market or exchange is the center of a
network of transactions where securities buyers
meet sellers at a certain price. A stock market or
exchange is not necessary a physical facility and
with the advancement of information technology
are increasingly rare those traders that exchange
their stocks in the floor of a major stock
exchange. The main stock market in the United
States is New York Stock Exchange (NYSE). In
Europe, examples of stock exchanges include
the London Stock Exchange, the Paris
Bourse, and the Deutsche Bourse. In Asia, the
main stock exchanges include the Tokyo Stock
Exchange, the Hong Kong Stock Exchange, and
the Bombay Stock Exchange. In Latin
America, there are such exchanges as the
BOVESPA in Brazil and the MERVAL in Argentina.

3. The DAX (Deutscher Aktien
IndeX, formerly Deutscher Aktien-Index (German
stock index)) is a blue chip stock market
index consisting of the 30
major German companies trading on the Frankfurt
Stock Exchange. Prices are taken from the
electronic Xetra trading system. According to
Deutsche Börse, the operator of Xetra, DAX
measures the performance of the Prime Standard’s
30 largest German companies in terms of order
book volume and market capitalization. It is the
equivalent of the FT 30 and the Dow Jones
Industrial Average, and because of its small
selection it does not necessarily represent the

4. The L-DAX Index is an indicator of the German benchmark
DAX index's performance after the Xetra electronic-trading
system closes based on the floor trading at the Frankfurt
Stock Exchange. The L-DAX Index basis is the "floor" trade
(Parketthandel) at the Frankfurt stock exchange; it is
computed daily between 09:00 and 17:30 Hours CET. The L-
DAX index (Late DAX) is calculated from 17:30 to 20:00 CET.
The Eurex, a European electronic futures and options
exchange based in Zurich, Switzerland with a subsidiary
in Frankfurt, Germany, offers options (ODAX) and Futures
(FDAX) on the DAX from 08:00 to 22:00 CET.
The Base date for the DAX is 30 December 1987 and it was
started from a base value of 1,000. The Xetra system
calculates the index after every 1 second since January
1, 2006.

5. Stocks in Germany had a positive performance during the
last month. Germany Stock Market (DAX), rallied 92 points
or 1.14 percent during the last 30 days. From 1970 until
2013, Germany Stock Market (DAX) averaged 2856 Index
points reaching an all time high of 8694 Index points in
September of 2013 and a record low of 372 Index points
in November of 1974. The DAX Index is the benchmark
index for the German equity market. It tracks the
performance of 30 selected German blue chip stocks
traded on the Frankfurt Stock Exchange, which represent
around 80 percent of the market capitalization listed in
Germany. The Index is free floating and has a base value
of 1000 as of December 31, 1987.

7. WEIGHTING AND CALCULATION :
The DAX indices are all calculated using capitalization
weighted index using the total return Laspeyres index for
Calculations.
DAX Indices are weighted by shares.
•The formula is:
Current index = Current total market cap of constituents
Previous Value / Previous Period
In comparison, the Shanghai SSE indices use the Paasche
weighted composite price index
formula. This means that the index bases its calculations on its
previous period for its calculations as compared to the Shanghai
Composite Index, which bases it on the base period.
The Base date for the index is 30 December, 1987 and it was
started from a base value of 1,000. The Xetra system calculates
the index after every 1 minute.

8. SELECTION :
The index sample of the DAX is selected according to the following
six criteria:
•generally a company needs to be listed for at least three years prior
•to the inclusion of its stock in the DAX;
•the free-floating capital must at least reach 15%;
•turnover;
•market capitalization;
•availability of early opening prices, and
•branch representativeness for the German economy.

9.  Germany’s benchmark DAX Index (DAX) will
climb to a record 9,000 by the end of the
year as the euro-region economy returns to
growth and investors brush off reduced U.S.
Stimulus
 If you look to the actual valuation
numbers, price-earnings ratios for
example, the Euro Stoxx 50 and the DAX
numbers are quite equal. The DAX trades at
13.10 times estimated earnings, compared
with 13.12 for the Euro Stoxx 50 Index.

10.  German election risk may have a bigger impact on the Dax rather than
the euro. EURUSD is trading in a tight range and we think that this pair
will be driven by dollar factors and the outcome of the FOMC meeting in
the coming days.