Wirecard replaces Commerzbank in DAX

The operator of the Frankfurt Stock Exchange, Deutsche Börse, unveiled the new composition of the blue chip DAX 30 index of leading German companies late on Wednesday as part of a regular review of listed firms' market capitalization and trading volumes.

It revealed that Commerzbank — Germany's second-largest lender and a founding member of the prestigious DAX club three decades ago — will have to concede its place to fintech company Wirecard.

Commerzbank has been an ailing bank for years. It had to be bailed out by the taxpayer during the global financial crisis and has seen its share price plunge by a third since January to give it a market cap of just over €10 billion ($11.5 billion), the lowest of all DAX 30 players.

Investors excited about Wirecard

By contrast, fintech firm Wirecard has been the darling of investors for a long time. The startup is currently listed on the TexDAX and makes software for cashless and contactless payments. It has seen its share price soar by 110 percent this year.

Wirecard is now Germany's third-largest financial group on the stock market behind Allianz and Munich Re.

Its rise has been fueled by the boom in e-commerce and surging demand for online transactions as well as payments made just by holding a credit card or smartphone over a reader — technologies that have shaken up the financial sector and left old-school banks struggling to keep up.

In a sign of its global ambitions, Wirecard has secured partnerships with Chinese mobile payment companies Alipay and WeChat Pay, hoping to cash in on the booming market of using apps to pay for goods in real-world stores.

hg/jd (AFP, Reuters)