Shares in German construction giant Hochtief joined the DAX, the Frankfurt Stock Exchange's main index, on Monday, replacing shares in luxury sports car maker Porsche — the largest shareholder in Volkswagen — which moved to the broader MDAX index.
This is the first time shares in the Essen-based company have been included in Germany's main equity index, a step of particular significance for index-tracking investment funds, which must adjust their portfolios to reflect changes in the DAX's composition.
Stocks included in the DAX are determined according to a set of criteria, including the market capitalisation of a company's free-float shares and trading volumes. Deutsche Börse, which operates the Frankfurt Stock Exchange, reviews the DAX, MDAX, SDAX and TecDAX indices every 3 months to reconsider the stocks listed on each.
Deutsche Börse announced Hochtief's promotion to the DAX earlier this month, following a sharp rise in the share price over the past year. The company has benefited from strong demand for data centres linked to artificial intelligence, particularly in the United States, as well as from large infrastructure investment programmes and increased military spending in many countries.
The value of its shares has more than tripled over the past 12 months.
With Hochtief's market capitalisation reaching approximately 38 billion euros ($43.5 billion), its shares became eligible for inclusion in the DAX, even though the free float accounts for no more than 20% of its total shares. Spanish construction company ACS owns approximately 80% of Hochtief and has controlled the company since 2011.
Hochtief represents the bulk of ACS's activities, with approximately three-quarters of ACS's revenues last year coming from Hochtief Group companies.
Hochtief operates as a holding company for a global network of construction firms involved in projects ranging from skyscrapers, hospitals, roads, bridges, tunnels and airports to solar power complexes, data centres, mining facilities and military infrastructure.