Linde Plc, the largest constituent in DAX®, will be deleted from the German equity benchmark and from STOXX European indices on Feb. 27 following the gas and engineering company’s announcement that it will delist its shares from the Frankfurt Stock Exchange (FSE) around March 1.
A listing on the Frankfurt Stock Exchange’s Regulated Market is a basic criterion for inclusion in the German index, as detailed in the rulebook (‘Guide to the DAX Equity Indices’), section 5.1.2.
Qontigo, operator of STOXX and DAX indices, said in a statement that the rules and timeline applicable for a delisting case were reviewed by the index governance bodies. It was decided, in this case, that Linde’s stock will be deleted from DAX ahead of the shares’ last trading day at FSE to “ensure the replicability and stability of the DAX index,” the statement said.
In a separate statement, Qontigo confirmed a similar approach with regards to STOXX indices.
Linde’s replacement in the indices will be announced on Feb. 17 at 22:00 CET, Qontigo said.
The weight of Linde shares in DAX has fluctuated around 10%, the maximum limit allowed to uphold the diversification of an investment portfolio and avoid overconcentration. The cap is also aligned with Europe’s UCITS regulation, which has a similar limit on single-stock fund portfolio components. In a public consultation in April and May 2022, market participants unequivocally voted in favor of keeping the weight cap in place.
