Worlds Largest Markets - Frankfurt Stock Exchange

Worlds Largest Markets - Frankfurt Stock Exchange
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The Frankfurt Stock Exchange traces its history all the way back to medieval trading fairs. The first recorded instance of such a fair is from the year 1150, an autumn fair. Two centuries later, Emperor Ludwig the Bavarian added a springtime fair, turning the city of Frankfurt into a center for commercial transactions. The fairs also germinated the concept of orders for goods, and the creation of merchandise specifically for trading in an open market.

As a result, Frankfurt became a bustling, wealthy city built on a trade based economy. In 1585 a bourse was created to set up currency exchange rates. The city became known as “the silver and gold hole” of the empire. During the 16th century, Protestant French and Dutch merchants immigrated to Frankfurt because of religious prosecution in their home countries, and this had the effect of establishing wholesale trading and banking in Frankfurt. Merchants from every part of Europe came to Frankfurt for trading. From the year 1585 on, during the trading fairs, merchants met to update currency exchange rates for trades that were handled in coins and notes. This meeting was named “Burs” or “Börse” from the beginning of the 17th century.

The Nazi Years

More recently, another significant period of history for the Frankfurt Stock Exchange began with the Nazi takeover in 1933. At that time stock exchange came under the purview of the central government, and 21 stock exchanges were reduced down to nine. Once foreign trading halted, and exchange was only supposed to benefit the wartime economy, the Frankfurt Stock Exchange had no real function. The exchange building suffered heavy damage during a 1944 air raid, and meetings had to be held in cellars. After the Nazi regime collapsed in 1945, the stock exchange closed for six months. It was one of the first German stock exchanges to open back up in September 1945, with foreign securities trading returning in 1956.

Frankfurt Stock Exchange Today

Today, the Frankfurt Stock Exchange is the largest of the eight German security exchanges that are operated by the Deutsch Boerse Group. This group also operates the European futures exchange called Eurex and a clearing company called Clearstream. In terms of turnover, it is the third largest securities exchange in the world. More than 85% of German securities turnover is accounted for by the Frankfurt Stock Exchange.

Frankfurt Stock Exchange at Night

Electronic System - the Xetra

The exchange uses an electronic trading system called Xetra, which partner exchanges such as the Vienna Stock Exchange, the Budapest Stock Exchange, and the Irish Stock Exchange also use. Xetra has opened the German stock market to investors from abroad, and foreign participants make up around 45% of the participants in the exchange. Trading takes place from 9:00 a.m. to 5:30 p.m. Mondays through Fridays. Currently, over 6,800 companies are traded on the Frankfurt Stock Exchange.

Frankfurt Stock Exchange Xetra

The DAX and more

The most referenced stock index in Germany is the DAX 30. It is composed of thirty major companies traded on the Frankfurt Stock Exchange. The index base date is December 30, 1987. It was started at a base value of 1,000. The Xetra trading system calculates an updated index value ever minute.

In the spring of 2009, rumors surfaced of possible merger talks between Deutsche Boerse and the New York Stock Exchange Euronext (NYX.N). If it had happened, it would have formed the largest stock exchange in the world by market value. But later the rumors were denied by the NYSE Euronext CEO, leaving Frankfurt Stock Exchange as “only” the largest in Germany

Frankfurt Stock Exchange - Large