Deutsche Börse Updates Composition Of Stock Indices Sector Indices For Neuer Markt Starting In May

On Tuesday, Deutsche Börse decided the composition of the equity indices MDAX, SDAX and NEMAX 50 as part of the regular index review. A decision was also made regarding the changes that would apply to the DAX in the case of a merger between Mannesmann and Vodafone. If the merger of Vodafone with Mannesmann is successful, Mannesmann will be replaced by Epcos in the DAX. The merger is successful if at least 50 percent of the Mannesmann shares are exchanged. To give market participants enough time to react, the DAX substitution will not be made until two full trading days after it has been announced that the 50 percent mark has been exceeded. In other words, if the announcement of a successful merger is made before trading opens on Thursday morning, the change in the index will be effective on Monday. This procedure is identical to the rule in the STOXX index family and the indices of FTSE International. The replacement of Mannesmann by Epcos will be made without adjusting the weightings and without a 15 percent ceiling on any one stock. Neither will be applied again until the next regular weighting adjustment on March 17. In the case of the planned merger of Veba and Viag, the Executive Board of Deutsche Börse has decided not to make any index adjustment in March. Furthermore, the MDAX will be changed as follows effective March 20: Baader Wertpapierhandelsbank, Celanese, GfK and VCL Film+Medien will be added to the index. Axa Colonia, Brau + Brunnen, DBV Winterthur and Varta will be dropped from the index. Axa Colonia and DBV Winterthur had to be deleted because the block ownership exceeds 85 percent. Brau+Brunnen and Varta have fallen out of the rankings under the so-called 110/110 rule for the criteria of stock-exchange turnover and market capitalization. Effective March 20, the following companies will be added to the SDAX: Brau+Brunnen, Gildemeister, OAR Consulting, Stada Arzneimittel as well as Wedeco. Baader Wertpapierhandelsbank, Bijou Brigitte, Hans Einhell, Koehler+Krenzer Fashion AG and VCL Film und Medien will be dropped from this index. Furthermore, the composition of the NEMAX 50 was reviewed for the first time. Also effective March 20, the following companies will be included in the index: Broadvision, Constantin Film, Direkt Anlage Bank, EVOTEC BioSystems, GAUSS Interprise, Pandatel, Pixelpark, ricardo.de, The Fantastic Corporation and Trintech Group. These companies will replace Artnet.com, Basler, Bintec Communications, Brain International, Cinemedia Film, Endemann Internet, i:FAO, JUMPtec, NSE Software and realTech. The main criteria for inclusion in the NEMAX 50 are stock-exchange turnover and market capitalization. According to this rule, a company can be included in the NEMAX 50 if it ranks among the 60 largest companies in this segment in terms of market capitalization and stock-exchange turnover. The Executive Board of Deutsche Börse also decided to introduce 10 sector indices for Neuer Markt in May: Biotechnology, Financial Services, Industrials & Industrial Services, Internet, IT-Services, Media & Entertainment, MedTech & Health Care, Software, Technology and Telecommunications. The base date of the new subindices is December 30, 1997 set at 100 points.