FRANKFURT (dpa-AFX) - Foreign investors dominate Germany's leading stock corporations - and pocket around half of the dividends. They held the majority of shares in 21 of the 40 DAX companies in 2023, according to a new study by auditing and consulting firm EY. On average, German investors held just over a third of DAX shares (33.6 percent), the study found. In contrast, around one in two shares (51%) were held by foreign investors - the rest of the shares could not be allocated.

North American investors in particular had significantly increased their exposure to the leading German index - from 17.4 percent in 2010 to 23.5 percent most recently. According to EY, however, the proportion of European investors fell slightly to 22.6 percent during this period.

According to EY, only nine DAX companies definitely had at least half of their shares in the hands of domestic investors as at December 31, 2023, including Deutsche Telekom, BASF, Deutsche Bank and BMW. For many companies, not all shares could be clearly assigned to the domestic and foreign categories, the authors wrote. The figures given are therefore minimum figures.

Only a minority of Dax dividends flow into German accounts

The strong weight of foreign shareholders also means that dividends flow abroad on a large scale. According to the study, of the 53.8 billion euros distributed by DAX companies for the past financial year, at least 26 billion euros went to investors abroad, while 22.2 billion went to investors in Germany.

The highest transfers abroad were made by Mercedes-Benz, it said. Dividends of 3.4 billion euros went to foreign investors and 2.1 billion to German investors. Other major dividend payers in the DAX, such as Allianz and Siemens, also transferred a low share to investors abroad.

More influence on companies

Henrik Ahlers, Chairman of the Management Board at EY, sees the strong commitment of foreign investors in the Dax as "proof of the continued high level of trust in the German economy". However, the strong weight of foreign shareholders is accompanied by an increasing influence on corporate decisions: "And the interests of a US investor may well differ from those of a German investor," says Ahlers. As a result, corporate strategies are even more strongly oriented towards the global competitive situation - and take less account of sensitivities in Germany.

The large proportion of American investors in the DAX in particular is nothing new. The capital market in Germany is considered to be comparatively weak.

Around 12.3 million people had shares, equity funds and/or exchange-traded index funds (ETFs) in their portfolios on average in 2023, as calculated by Deutsches Aktieninstitut. Based on the German population aged 14 and over, only just over one in six people were involved in the stock market./als/DP/zb