Find our complete and detailed fact sheets about the main stocks in the German stock market
When you invest online or build up a stock portfolio, you can invest in the German stock market. Many of the stocks listed on the Frankfurt Stock Exchange are accessible to traders from other countries, especially European investors. But what are these shares and therefore which are the most important German shares that can be invested in and how can they be analysed?
As you probably already know, the financial centre where German shares are listed is the Frankfurt Stock Exchange. However, the shares in which you will be able to invest are limited and it is more complicated to buy or trade shares in small companies.
The shares you will be able to invest in from France or other European countries are generally shares in companies with the largest market capitalisations in that country. In other words, you will have no problem taking positions or placing orders on the shares that are included in the DAX 30, the benchmark stock market index in Germany.
Which German shares you wish to invest in depends on a number of factors. Firstly, you will need to make this choice according to your investor profile. Indeed, in order to be able to understand and anticipate future trends in these shares, you need to know these companies perfectly and be able to understand their capacity for growth.
Therefore, always favour a company or sector of activity with which you are comfortable. As far as the other elements to be taken into consideration are concerned, you will of course need to assess the capacity of the chosen shares to gain in value over time. To do this, you will need to carry out several different and complementary types of analysis, as we will see below.
Finally, be careful to choose a stock for which you can easily find quality information. When investing in foreign shares, it is indeed important to make sure you have reliable sources to carry out your analyses.
Let's take a closer look at the analysis of German shares. As with shares from other countries, it is recommended that you use a variety of different types of analysis to maximise your chances of getting quality signals. The two most common types of analysis used by investors here are technical and fundamental analysis.
For technical analysis, consider choosing quality stock charts that report the price of the selected German share in real time and live. Ideally, these charts should allow you to quickly read current and past movements and also display various indicators.
As far as fundamental analysis is concerned, this time it consists of using data other than the share price and more specifically the events and publications that are most likely to have an influence on the share. This may include financial data of the German company such as results or ratios, news data with strategic operations carried out, partnerships, disposals and acquisitions, or data concerning competition or the segments in which the group has its main activities.
The comparison of the signals obtained by these two methods will enable you to maximise the effectiveness of these analyses.
The German Stock Exchange is the Frankfurt Stock Exchange, which is the country's most important financial centre and the 12th largest stock exchange in the world in terms of market capitalisation. This exchange handles more than 90% of the total transactions of the German stock market. The total market capitalisation of German companies listed on the Frankfurt Stock Exchange currently exceeds 2.17 trillion euros and has shown a slight increase in recent years, which is a sign that this economy is growing again. But the German stock exchange also has companies from other countries, including North and South America, Europe, Asia, Australia and Africa.
Deutsche Börse is in charge of the management of the German Stock Exchange, since the administration and operation of the Frankfurt Stock Exchange was transferred from the Frankfurt Chamber of Commerce and Industry to the Frankfurter Wertpapierbörse AG, which later became Deutsche Börse AG.
The trading system of the Frankfurt Stock Exchange is fully electronic. The system called Xetra is thus one of the largest electronic trading platforms in the world. It was launched in 1997 and has enabled the German stock exchange to strengthen its competitive position and created attractive framework conditions for foreign investors and market participants. The Frankfurt Stock Exchange is now a leading international trading centre.
The flagship index of the German stock exchange is, of course, the DAX. The DAX is the main stock market index of the Frankfurt financial centre and is representative of the German economy and its growth.
The term DAX here stands for Deutscher AktienindeX, which simply means "German Stock Index". The DAX 30 is the most common name for this online index, as it includes the 30 most important companies listed on the Frankfurt Stock Exchange. The performance of these companies is calculated both in terms of trading volume and total market capitalisation.
Historically, the DAX index was launched on 31 December 1987 with a base value of 1,000 points. It was published for the first time on that date. A good knowledge of the DAX 30 index is important if you want to invest in the German stock market and in the country's main shares. The DAX 30 index contains some of the world's most important companies and is therefore particularly attractive to investors.
The most important of these companies listed on the DAX are Siemens, Deutsche Telekom, Allianz, Volkswagen, BMW and Bayer. These are the shares that are most often offered by brokers and online brokers in the market.