Porsche Leaves DAX Index and Moves to MDAX
The ISS Stoxx company, affiliated with Deutsche Börse and responsible for the periodic review of German indices, has announced that Porsche will exit the DAX index on September 22 following a one-third decline in its market value over the past year, which has led to its downgrade to the MDAX index designated for mid-cap companies.
Porsche, a subsidiary of the Volkswagen Group, joined DAX in December 2022 after its IPO and has remained in the index without interruption since then. However, the continuous decline of its share price from around €120 to approximately €45 hastened its exit.
Climate and Economic Pressures
This decline reflects the challenges the company faces in the global automotive market, impacted by the shift towards electric vehicles, intensified competition in the luxury segment, and a slowing economic climate. Furthermore, its declining financial results have weighed on its market value and ended its presence among the largest 40 listed companies in Germany.
Sartorius Exits as Well
The changes are not limited to Porsche; Sartorius, a supplier of pharmaceutical and laboratory products, will also leave the DAX index after joining in 2021 when it expanded from 30 to 40 companies. Both companies will move to the MDAX.
In contrast, two new companies will join the DAX: the real estate platform Scout24 and manufacturing equipment company GEA. Analysts believe these changes will diminish the attractiveness of Porsche and Sartorius shares, given that index funds will need to rebalance their portfolios.
