Two Years Of SMAX - Deutsche Börse Gives Positive Assessment - SMAX Also A Successful IPO Segment - As Of 2002, International Accounting Standards In Small-cap Segment

Two years after being launched on April 26, 1999, Deutsche Börse's SMAX quality segment has established its position as a successful platform for trading in the equities of small and medium-sized companies. There are 127 companies listed in the small-cap segment in the meantime, and 28 of them combined their IPO (initial public offering) with participation in SMAX, which means that SMAX has also developed into a successful segment for IPOs. "With SMAX we have provided a platform for small caps that has aroused the interest of investors through higher transparency and secured liquidity," said Volker Potthoff, the Executive Board member of Deutsche Börse AG who is responsible for the cash market.

In terms of composition, SMAX represents a cross-section of companies and industries in the German small and medium-size business sector. The established small and medium-sized firms are especially attractive for investors with a medium-range risk-reward profile. Most of the funds invested in SMAX come from Germany, small-cap funds make up an increasing proportion of the investments in this segment.

Deutsche Börse has set high standards of liquidity and transparency for its SMAX quality segment. The companies have to publish annual reports in German and English as well as the percentage of shares held by members of the Management and Supervisory Boards. The companies also have to hold information meetings for analysts every year. As of reporting year 2002, the companies will also have to report their financial figures according to international accounting standards. In Deutsche Börse's estimation, this will make the companies even more attractive, especially for international investors.

To support SMAX-listed companies, Deutsche Börse holds workshops on international accounting standards, which have met with a good response. Deutsche Börse calculates two indices, the SMAX All-Share Index and the SDAX, as barometers for the SMAX stocks.

At least one Designated Sponsor for every SMAX stock provides for additional liquidity on the Xetra electronic trading system, which now accounts for nearly 40 percent of the trading volume, and is on the rise. These intermediaries usually also provide research on the SMAX shares and are actively involved in sales.