German investors own less than a third of the shares in Dax companies. That’s good news, scoffers might say: this is how many escaped the heavy losses on the stock exchanges this year.
In fact, this dependency is a danger for the courses. The proportion of foreign shareholders was high in the past without having a negative effect. But that was in times of stable exchange rates. This year, however, the euro depreciated by 13 percent against the dollar.
As a result, exchange rate risks have gained in importance in investment decisions. For dollar-zone shareholders, the picture in Europe is even bleaker than it already is.
That alone can move prices. However, the high number of foreign investors only developed explosive force through a second development: the importance of the German stock market is declining globally.
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Economic power and market capitalization are not related
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