Foreign investors hold the majority stake in Dax companies
In 2021, foreign investors owned approximately 52.6% of the stock in the DAX 40, a group of Germany's top corporations. This represents a significant increase from domestic ownership, with German investors owning about 33.1% of the DAX 40's stock.
The increase in foreign ownership can be attributed to several interrelated factors. Germany’s position as a leading global exporter, with exports accounting for a significant portion of its GDP, has made its top corporations attractive targets for foreign investors. The relatively stable economic environment, including government initiatives promoting investments and infrastructure development, has bolstered investor confidence.
Increased integration of capital markets across the EU and globally has facilitated greater foreign participation in German equity markets. The relative stability and size of the German economy make its corporations attractive for portfolio diversification and long-term holdings.
Trade and regulatory environment, labour market factors, and innovation also play a crucial role. While some recent trade developments have introduced complexities, many companies continue to seek foreign investment to mitigate risks and access international markets. Germany’s advanced research and development capabilities and focus on innovation have increased the value proposition for foreign investors.
Since 2010, the share of U.S. investors in the DAX 40 has increased from 17.1% to 25.4%. However, some companies, such as Porsche AG, despite being part of the DAX, have a majority of their shares owned by German investors (88%). On the other hand, the diagnostics company Qiagen had 93% of its shares owned by foreign investors in 2021.
The remaining shares in the DAX 40 in 2021 could not be definitively attributed. North American investors acquired additional shares in 40 DAX companies in the previous year. In 2021, DAX companies distributed a total of 54 billion euros in dividends, with half of these dividends flowing abroad.
Henrik Ahlers, CEO of EY Germany, views the strong engagement of foreign investors as "proof of the continued great attractiveness of German top companies." The trend of increasing foreign participation in Germany’s corporate landscape reflects a broader trend of globalization, strategic economic policies, integration into global financial markets, and Germany’s strong export and innovation base.
- The relatively stable economic environment, including government initiatives promoting investments and infrastructure development, has bolstered foreign investor confidence, making German corporations, such as those in the DAX 40, attractive targets for long-term holdings.
- Increased integration of capital markets across the EU and globally, as well as the relative stability and size of the German economy, have facilitated greater foreign participation in investing in German equities for portfolio diversification.
