The Neuer Markt Report shows that the German capital market and especially the Neuer Markt have made substantial gains towards closing the gap in relation to the American structures and exchanges. The legal and regulatory framework conditions on the Neuer Markt are competitive in the international context. However, deficits do exist with regard to the quality of information and practices in connection with going public as well as the powers for monitoring and enforcement by the supervisory authorities.
Based on the Neuer Markt Report, Deutsche Börse, together with its Primary Markets Advisory Committee, will to draw up a capital market code of best practice for companies and lead managers going public by the middle of 2002. This code is intended in particular to make the listing prospectus the sole basis of information for investors, enhance the quality of the prospectus and make the language used in the prospectus easier to read and understand. It also calls for restrictions on the distribution of research reports immediately before and after the IPO. Deutsche Börse is planning to make compliance with the code mandatory for the Neuer Markt; for IPOs in other segments, compliance with the code will be voluntary. At the same time, Deutsche Börse wants to formulate suggestions for lawmakers.
In the framework of the Neuer Markt Report, Dresdner Kleinwort Wasserstein has analyzed the factors influencing the current trend and price performance on the world stock markets. According to this analysis, the Neuer Markt is still in the leading position among European growth markets in terms of market capitalization, stock-exchange turnover, new issues and transparency standards. A performance comparison with Nasdaq in the United States, on the other hand, is only useful up to a point because of the differences in the stage of evolution and sector division. Share price performance of the Neuer Markt in the current correction phase is currently lagging behind Nasdaq due to the higher weighting of the sectors Internet, online banks and biotechnology on Neuer Markt whereas Nasdaq has more companies from the sectors software, semi-conductors and telecommunications.
Dresdner Kleinwort Wasserstein also examined the valuation methods and their applicability to growth companies. The investment bank comes to the conclusion that traditional analysis methods will also become more important in the case of growth companies.
In the framework of the Neuer Markt Report, Shearman & Sterling compared German capital market law with the regulatory environment in the United States. It finds that the capital-market law standards on Neuer Markt are not just the benchmark for the European growth markets; in particular, the listing requirements and disclosure obligations are comparable to those of Nasdaq for the most part, as Shearman & Sterling emphasizes.
Differences between the United States and Germany exist above all in the regulatory environment, especially in monitoring and enforcement of the applicable rules and regulations, as well as due to the relatively young European equity culture. Whereas in the U.S., it is not the exchange but the supervisory authority Securities & Exchange Commission (SEC) that holds a central position with comprehensive regulatory, monitoring and disciplinary jurisdiction, in Germany Deutsche Börse has taken over the role of shaping the Neuer Markt. Therefore, as they point out, there is also a need for action on the part of the German legislature. The legal experts Shearman & Sterling recommend, among other things, a simplification of the existing structures of exchange supervision, tighter liability standards, tougher penalties and a consistent investigation and prosecution of legal violations.
Roland Berger Strategy Consultants have examined the effects of flexible capital markets on growth and employment in the Neuer Markt Report. According to the corporate strategy consultants, Germany and Europe hold high potential for development in the capital market alignment in regards to so-called equitization. Globalization and liberalization of monopoly markets like the telecommunications market are the most important forces driving this structural change, they claim.
