Germany Shuts Down High-Tech Market
Thu Sep 26, 8:04 AM ET
By DAVID McHUGH, AP Business Writer
FRANKFURT, Germany (AP) - Germany's stock exchange operator said Thursday it plans to close its Neuer Markt after the German equivalent of the Nasdaq lost almost all of its value in a two-and-a-half year slide. The exchange also plans tougher reporting standards for listed companies on its main market.
The Neuer Markt as well as the small-cap SMAX segment will be shut by early 2003, with companies listed there transferred to two new groupings with different reporting rules, Deutsche Boerse said in a statement.
The exchange said the move is intended to reassure investors, who have seen a 96 percent drop in the Neuer Markt's value from its peak in March 2000, about the reliability of the companies listed.
"We want to organize our markets ... according to the needs of investors," Deutsche Boerse executive Volker Potthoff said. "We are ensuring the highest transparency with clear rules."
Deutsche Boerse said it will reorganize the market into a top tier of companies aiming to draw on international capital markets, and a second group for companies operating largely nationally.
The flagship Prime Standard segment will be open only to companies who follow international accounting rules and provide comprehensive information to investors, including quarterly earnings reports, the exchange said. The reporting rules will be less stringent for the lower National Standard.
The new standards will also have the force of law, under a recent reworking of German securities legislation, the company said.
Indexes will be composed solely of Prime Standard companies, with German blue chip stocks continuing to be grouped in the familiar DAX index. Fluctuations in the value of smaller companies will be reflected by two new indexes, one for firms in traditional industries, and another for high-tech companies.
Once the toast of software, e-commerce and Internet investors, the Neuer Markt's slump and a lack of new stock offerings had led to growing speculation that its days were numbered.
After its launch five years ago, it made billions for its investors, soaring to 8,140 in March 2000 before a plunge. It played a key role in the expansion of Germany's tech sector.
But skepticism about its future increased when the Swiss stock exchange last month mothballed its tech segment — also called the Neuer Markt. The Swiss closed their index to new issues and said it wouldn't actively market the name any more, though the segment still exists and the stocks still trade.
Other tech markets across Europe have suffered steep declines as well: Italy's similarly named Nuovo Mercato and Paris' Nouveau Marche are each down 93 percent from their 2000 peaks. |
