Companies from the USA, Canada, Great Britain and Australia dominate the market.
Foreign equities are trendy on the Frankfurt Stock Exchange. If you look at the figures for the values traded in Frankfurt, this is astonishing: over 13,000 companies from abroad are tradable in Frankfurt. In contrast, there are just under 700 German companies that can be traded on the Frankfurt Stock Exchange.
Where do foreign companies come from that clearly dominate trading on the Frankfurt Stock Exchange? Companies from the USA are clearly ahead with around 3,200 companies, followed by Canada with almost 2,000 companies. This is followed by the United Kingdom (over 1,000 companies), Japan (720 companies) and Australia (669 companies).
This means that, compared to German companies, almost 5 times as many companies from the USA and almost 3 times as many Canadian shares can currently be traded on the Frankfurt Stock Exchange. And the figures also say that more stocks from companies in the UK and Japan are tradable than German companies. Companies from Australia – a continent so incredibly far away from Germany – are almost the same in terms of tradable companies.
Dominance of small enterprises
All Large & Giant Caps? No, not at all. The size[1] of foreign companies traded in Germany varies with a clear tendency towards small companies: among American companies , 29% of companies are small caps, almost 16% microcaps and at least 3% nanocaps. Almost half of the American companies trading in Germany thus have an MK of less than €1 billion.
In the case of Canadian companies , the figures show an even clearer trend towards small businesses: approx. 17% SmallCaps, 32% MicroCaps and almost 41% NanoCaps. This means that the market capitalisation of almost 90% of Canadian assets traded in Germany is below €1 billion.
And the Australian companies? A similar picture to the Canadian companies: 28% SmallCaps, 36% MicroCaps and 17% NanoCaps. 80% of Australian companies traded in Germany have a market capitalisation of less than €1 billion.
[1] Date of data collection 02.10.2022. The definition of company sizes is as follows: SmallCaps: market capitalisation of less than €1 billion to €100 million, MicroCaps: market capitalisation of less than €100 million to €10 million, NanoCaps: market capitalisation of less than €10 million.
The interest of German private investors in foreign values?
Being tradable on the Frankfurt Stock Exchange is one thing. But what about the interest of private investors in these foreign values? In many internet forums, German investors discuss the companies from the USA, Canada, Great Britain or Australia very actively and intensively. An interesting detail: Although much more Canadian securities are tradable on the Frankfurt Stock Exchange, there are currently significantly more Australian securities being discussed – according to the US values, of course.
Which industry is currently preferred?
A look at the German discussion forums shows that biotech, commodity stocks and green equities are on trend. And it is not surprising that many German shareholders are interested in foreign assets. Because: Only 13 German biotech companies are listed on German stock exchanges, but 311 US companies, 67 Canadian and 30 Australian biotech companies. There is also a clear discrepancy in commodity values: 120 commodity companies from Australia and several hundred commodity companies from Canada are traded on the German stock exchanges. And the number of German companies? Less than 10 companies. So if German investors want to invest in trendy industries, they can hardly avoid investing in foreign companies.
And the volume of foreign assets traded?
Foreign companies have quite considerable trading volumes. Tesla , for example, has an average daily trading volume on German stock exchanges of €56 million. However, foreign small caps also have some impressive figures: the average daily trading volume on German exchanges for the US small-cap ‘Bed Bath & Beyond‘ is €5.1 million, the British small-cap ‘ITM Power‘ has a daily trading volume on German exchanges of €2.5 million, and the Canadian ‘Standard Lithium‘ – also a small-cap – has an average daily trading volume of just under €2 million.[2] Innocan Pharma – a Canadian MicroCap company – realizes approximately €200,000 in trading volume per day in Germany. By way of comparison, the home exchange, the Canadian Securities Exchange, Toronto, is only $15,700 a day.
But, of course, there are also foreign values that have little or no trading volume in Germany. Particularly in the case of small values, it can be assumed that the volume of trade is much related to the commitment of companies on the German capital markets to make companies known to investors.
[1] Date of data collection 02.10.2022. The definition of company sizes is as follows: SmallCaps: market capitalisation of less than €1 billion to €100 million, MicroCaps: market capitalisation of less than €100 million to €10 million, NanoCaps: market capitalisation of less than €10 million.
[2] The following applies to all companies mentioned: As of 01.10.2022, 30-day average, sum over all exchanges and trading platforms in Germany.