International investors increased their percentage of shareholdings on the German DAX stock exchange, a study by the accounting and consulting firm Ernst & Young (EY) showed on Wednesday.
According to the study, the percentage of shares of companies listed on the Frankfurt-based exchange that are owned by international investors rose from 52.4 percent in 2016 to 53.7 percent in 2017. During the same period, the relative holdings of German nationals fell from 37.7 percent to 35.8, while 10.5 percent of stocks could not be geographically-allocated.
Most foreign owners of publicly-listed firms were located in Europe, controlling 28.2 percent of shares in 2017. Investors from North America held a 20.5-percent share of stocks.
"Many Dax-listed firms have by now become globally operating entities with headquarters in Germany. The growing importance and influence of international investors is a logical corollary in this context," EY manager Mathieu Meyer said about the findings.
The trend was even more striking from a long-run perspective, with 22 assessed firms witnessing an average increase in international ownership from 45 percent to 57 percent between 2005 and 2017. In the extremely internationalized cases of Leverkusen-based chemicals producer Bayer and Munich-based Linde engineering group, the share of foreign stock holdings grew even stronger, by more than 35 percentage points.
Meyer emphasized that German blue-chip firms were operating in a "strongly globalized economy" and were hence also recording larger shares of their revenue abroad. The EY manager argued the development was a sign of the strength of the domestic economy, as many German firms had achieved leading positions in foreign markets within their respective industries.
Structural change in international ownership patterns also means corporate strategies are being adapted to new commercial realities.
"Firms are modernizing themselves and undertaking far-reaching alterations of their business models by breaking up large corporate entities into independent businesses and committing to large takeovers of competitors themselves," Meyer explained.
The study further highlighted that private savers only accounted for around 11 percent of shares issued by a total of 30 DAX corporate titles. As a consequence, they largely failed to benefit from dividend payouts worth 36.1 billion euros (44 billion U.S. dollars) in 2017.
By contrast, institutional investors including insurance companies, pensions and investment funds controlled more than six out of ten (63 percent) DAX shares and were particularly dominant in the cases of Deutsche Boerse (93 percent), Infineon (90 percent) and Bayer (88 percent).
Regardless of share composition, Meyer predicted international demand for shares of German companies listed on the DAX exchange would continue to grow "due to their global success".
According to the study, the percentage of shares of companies listed on the Frankfurt-based exchange that are owned by international investors rose from 52.4 percent in 2016 to 53.7 percent in 2017. During the same period, the relative holdings of German nationals fell from 37.7 percent to 35.8, while 10.5 percent of stocks could not be geographically-allocated.
Most foreign owners of publicly-listed firms were located in Europe, controlling 28.2 percent of shares in 2017. Investors from North America held a 20.5-percent share of stocks.
"Many Dax-listed firms have by now become globally operating entities with headquarters in Germany. The growing importance and influence of international investors is a logical corollary in this context," EY manager Mathieu Meyer said about the findings.
The trend was even more striking from a long-run perspective, with 22 assessed firms witnessing an average increase in international ownership from 45 percent to 57 percent between 2005 and 2017. In the extremely internationalized cases of Leverkusen-based chemicals producer Bayer and Munich-based Linde engineering group, the share of foreign stock holdings grew even stronger, by more than 35 percentage points.
Meyer emphasized that German blue-chip firms were operating in a "strongly globalized economy" and were hence also recording larger shares of their revenue abroad. The EY manager argued the development was a sign of the strength of the domestic economy, as many German firms had achieved leading positions in foreign markets within their respective industries.
Structural change in international ownership patterns also means corporate strategies are being adapted to new commercial realities.
"Firms are modernizing themselves and undertaking far-reaching alterations of their business models by breaking up large corporate entities into independent businesses and committing to large takeovers of competitors themselves," Meyer explained.
The study further highlighted that private savers only accounted for around 11 percent of shares issued by a total of 30 DAX corporate titles. As a consequence, they largely failed to benefit from dividend payouts worth 36.1 billion euros (44 billion U.S. dollars) in 2017.
By contrast, institutional investors including insurance companies, pensions and investment funds controlled more than six out of ten (63 percent) DAX shares and were particularly dominant in the cases of Deutsche Boerse (93 percent), Infineon (90 percent) and Bayer (88 percent).
Regardless of share composition, Meyer predicted international demand for shares of German companies listed on the DAX exchange would continue to grow "due to their global success".
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