Buying Germany
December 19, 2007
Foreign ownership in the biggest companies on the German stock exchange (DAX) reached a record 52.6 percent this year, up 20 percent from 2005, the business daily Handelsblatt reported.
"The trend shows how attractive German companies and stocks are abroad," Franz-Josef Leven from the stock market association Deutsches Aktieninstitut, which confirmed the report, told the paper.
The joint-stock company Deutsche Börse ranked in with the highest foreign investment at 84 percent, followed by Adidas (79 percent) and Bayer (78 percent).
Formerly state-owned firms like Deutsche Post and Lufthansa reported somewhat lower foreign holdings, at 39.6 and 37.4 percent, respectively. US-based Blackstone owns 4.4 percent of Deutsche Telekom, while Dubai International Finance purchased 2.2 percent of Deutsche Bank earlier this year. Investment firms Barclays, Sun Life and Capital Research each hold five percent of Merck pharmaceutical company.
German exports spark foreign interest
In addition to soaring revenue and high growth rates, German firms have become more attractive to foreign shareholders by upping their activity abroad. Germany's four largest stock exchanges, the Dax, MDax, SDax, and TecDax, earned 59.5 percent of their total revenues abroad this year, a 5 percent increase over last year.
The subprime lending crisis and sagging euro-dollar exchange rate have also sparked interest in German and European stocks, while drawing investors' attention away from the US stock market.
The trend of foreign investment in German firms "is irreversible and even continues when the economic situation weakens in individual countries like the US," said Oliver-Wyman consultant Thomas Kautzsch.
Leven, however, said that he predicted the move to German and European stocks would likely loose speed.
Expert: Foreign investment is normal
Deutsche Aktieninstitut president Rüdiger von Rosen cautioned against seeing the development as a foreign take-over of German firms.
"There are a lot of pension funds and banks among the investors," he said in an interview with ARD. "It may also be that German citizens living abroad (in Switzerland, for example) have purchased massive amounts of Germans stocks."